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As reported in FierceHealthcare, “Medicare Advantage insurers scored a significant legal victory” when a U.S. District Court judge recently “struck down a 2014 rule requiring [plans] to report and return overpayments.”  Further, according to Modern Healthcare, this ruling “leaves the federal government with fewer tools to combat upcoding practices that cost the taxpayer-funded Medicare program billions of dollars.”

Health policy experts, according to Modern Healthcare, “said that the overpayment rule was meant to curb upcoding and fraudulent billing; vacating it paves the way for more of the same.”

According to the judge’s order, the effect of the rule was that MA insurers were paid less to provide the same coverage to their enrollees than the Medicare program pays for comparable individuals in traditional Medicare. 

However, as reported in Modern Healthcare:

Experts watching the decision argued research flies in the face of these conclusions. According to MedPAC's latest report, payments to Medicare Advantage were 2% to 3% higher in 2016 than they would have been if those same patients were treated under fee-for-service Medicare. That's because Advantage plans' coding practices have resulted in their enrollees having an average risk score that's 8% higher than similar Medicare fee-for-service beneficiaries, despite strong evidence that Advantage members are not sicker.

At a time when some policymakers continue to push for significant cuts to Medicare, both Congress and CMS should redouble their efforts to ensure that wasteful overpayments to Medicare Advantage plans do not continue.  Unfortunately, this court ruling is a step in the wrong direction.

September 13, 2018 – D. Lipschutz

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