The Trump Administration made removing waste, fraud, and abuse a cornerstone of its policy platform this year, and Vice President Vance recently upheld that promise by targeting fraud in Obamacare. The Vice President and his anti-fraud task force recently canceled approximately 315,000 fraudulent Obamacare enrollments, which could save up to $2.2 billion in federal spending.
It’s commendable that the Vice President is taking Obamacare fraud seriously. And as Market Institute president Charles Sauer writes in his op-ed in the Daily Caller News Foundation, Vice President Vance’s task force should target Medicare Advantage next.
“Medicare Advantage is the popular alternative to traditional Medicare, where enrollees can choose from a selection of competing private plans. While it is popular with Medicare beneficiaries, the program hemorrhages taxpayer dollars. The program’s payment incentives encourage insurers to make patients appear sicker than they are by adding or exaggerating diagnoses, generating higher reimbursements that do not correspond to the medical care they received.”
If policymakers reduce high-intensity medical coding, or “upcoding,” in Medicare Advantage taxpayers could save up to $22 billion this year – roughly ten times the previously announced Obamacare savings. To prevent upcoding, lawmakers must understand the tactics that Medicare Advantage insurers regularly use to upcode diagnoses to inflate government payouts. Sauer describes a few of these tactics below:
“One of these tactics is conducting health risk assessments, where insurers send nurses and other health professionals to patients’ homes and add diagnoses to patients’ charts solely to increase reimbursements. Many of these tactics have contributed to billions in excess spending. An Inspector General’s report found that $7.5 billion in Medicare Advantage payments in 2023 were attached to diagnoses from 2022 that received no follow-up visits, procedures, or tests.”
Upcoding also has financial consequences for taxpayers and the long-term health of the Medicare program.
“As insurers upcode and inflate their Medicare Advantage reimbursements, they contribute to the insolvency of the Medicare hospital insurance trust fund, which finances Medicare’s hospital and skilled nursing care. That trust fund could become insolvent by 2033, according to the program’s trustees. Absent congressional action, depletion of the trust fund would trigger an estimated 11% cut in Medicare Part A payments, which could disrupt patient access to hospital care.”
Both the White House and Congress can tackle this issue at the same time. The Vice President’s task force can use its AI-assisted, proactive tactics to help the Department of Justice and Health and Human Services enforce the law.
“In Congress, lawmakers should work to pass the No UPCODE Act without delay. The bill would address Medicare Advantage’s poor incentives by banning diagnoses added during health risk assessments and chart reviews, and tightening oversight of Medicare Advantage’s reimbursement practices.”
The Trump administration has a strong track record of removing waste, fraud, and abuse from government programs so far. If the Vice President’s task force is looking for another area to cut wasteful spending, Medicare Advantage is the obvious next target.
You can read the full op-ed in the Daily Caller News Foundation here.
