The Senate GOP is currently debating the party’s third fast-tracked spending bill in two years, colloquially known as “Reconciliation 3.0.” But the defense and election security bill has some Republican spending hawks concerned, as its $95 billion price tag comes with no attached spending cuts.
As Charles Sauer, founder and president of the Market Institute, writes in his Washington Examiner op-ed, Republicans should try to get spending hawks on board by including reforms that would help rectify Medicare reimbursement waste and Medicare Advantage fraud that costs taxpayers millions. “Currently, hospitals are reimbursed significantly more than independent providers for identical care under Medicare, while flaws in Medicare Advantage’s payment system allow insurers to receive inflated reimbursements through upcoding.” Cleaning up these sources of government waste would help offset Reconciliation 3.0’s cost, giving Republicans a fiscally responsible policy win.
If Republicans get wasteful Medicare spending and Medicare Advantage fraud under control, the potential savings could act as a spending cushion for Reconciliation 3.0 and give Republicans a political boost before the midterms.
Outside of healthcare costs, voters rank wasteful overspending on government healthcare programs second as the most pressing healthcare issue this year. Sauer explains exactly how hospitals waste taxpayer dollars: “One major opportunity lies in traditional Medicare, where the federal government reimburses hospitals at far higher rates than independent providers for providing many of the same outpatient services. It’s a clear waste of taxpayer dollars, and lawmakers should equalize reimbursement rates across care settings through site-neutral payment reform — policies that pay the same amount for the same service, regardless of where it is provided.”
The other major opportunity for reducing fraud lies in Medicare Advantage, the privately-run alternative to traditional Medicare. Here, insurers that contract with Medicare run plans for Medicare recipients, but get reimbursed at higher rates for sicker patients. This reimbursement incentive encourages contracted insurers to “upcode” – or upgrade diagnoses for patients that do not reflect their actual health.
Sauer highlights the financial consequences of upcoding for taxpayers.
“Still, the evidence is clear: multiple Inspector General reports point to insurer upcoding costing U.S. taxpayers millions each year. MedPAC, the nonpartisan commission that advises Congress on Medicare policy, estimates that Medicare Advantage will shell out $1.3 trillion in excess payments over the next decade absent reforms.”
Sauer calls on Republicans in Congress to include Medicare and Medicare Advantage reforms in Reconciliation 3.0.“Rather than risk leaving this part of their agenda to a lame-duck Congress, Republicans can act now and amend the existing reconciliation bill with portions of the Same Care, Lower Cost Act and the No UPCODE Act to control overpayments in Medicare and Medicare Advantage, respectively. Both bills take steps to rework Medicare’s reimbursement policies and better align payments with the care patients actually receive.”
The GOP should recognize a golden opportunity when they see it. Healthcare reforms that reduce fraud are not just good politics – they can strengthen Medicare and help patients in the long run. Republicans should act on these proposed reforms immediately.
You can read the full op-ed in the Washington Examiner here.
