Medicare Advantage plans frequently charge thousands of dollars more for major medical illnesses than standard Medicare, and CMS does not oversee this practice. Upcodes for diabetes with complications, severe depression, and congestive heart failure are among the most common. In 2005, Congress acknowledged the issue and instructed CMS to establish an annual coding intensity adjustment for Medicare Advantage plans.
Overpayments to Medicare Advantage plans have been a concern for years, but a new study demonstrates that these payments are becoming an increasing burden on taxpayers. According to the Center for Medicare Studies, Medicare Advantage plans cost the government over $70 billion between fiscal years 2008 and 2013. The overpayments are frequently caused by errors in risk scores, which are significant for Medicare recipients but costly for taxpayers. The study also indicated that Medicare Advantage plans get far more overpayments than traditional Medicare. Incentives for MA plans to disclose enrollee diagnoses more accurately contribute to the issue. This indicates that MA plans are compensated more for identifying and treating more severe diseases than FFS plans. This necessitates the Centers for Medicare & Medicaid Services to change payments to account for the diagnosis variation. These modifications are called "coding intensity changes" and might be challenging to implement. In addition, Medicare trustees have stated that the Part A trust fund will be depleted by 2026. Part A is funded through payroll taxes paid by both businesses and employees. However, Medicare Advantage plans will not campaign for a payroll tax hike, even if it means paying more for the same coverage. A significant chunk of Medicare Advantage's cost to taxpayers is attributable to overpayments to PFFS plans, which constitute the program's most rapidly expanding component. In 2008, according to recent research by the Commonwealth Fund, private fee-for-service plans accounted for 16.6% of all Medicare Advantage overpayments. This amounts to nearly $2.5 billion in additional expenditures in 2008. The Obama administration has attempted to restrict the growth of PFFS, but the number of plans continues to rise. These plans' enrollment increased from around 220,000 in December 2005 to nearly two million in February 2008. In 2010, Congress passed the Medicare Improvements for Patients and Providers Act of 2008, restricting PFFS programs' growth. Beginning in 2011, the law also requires specific plans to offer provider networks. The increased costs were transferred to beneficiaries in the form of enhanced benefits. By November 2009, 10,9 million Medicare patients were enrolled in MA managed care plans, constituting one in four Medicare recipients. This is a growth of almost one million from November 2008. From 2003 to 2009, registrants climbed by more than two million. However, rural areas saw a more nominal growth in MA enrolment than metropolitan areas. AHIP and the Commonwealth Fund oppose measures that would cut the cost of Medicare Advantage to taxpayers. They assert that overpayments are not the primary issue. In addition, they assert that PFFS plans are superior to Medicare because they offer more excellent coverage and fewer out-of-pocket costs. This study investigated the impact of Medicare Advantage on the practice patterns of regular Medicare recipients. Comparatively, Medicare Advantage subscribers reported better physical and mental health than their standard Medicare peers. However, no statistically significant changes in use rates were observed. However, Medicare Advantage enrollees had a lower utilization rate overall. In addition, the study indicated that the utilization of emergency room services was lower in Medicare Advantage than in standard Medicare. The CMS and private payers have established multiple payment models encouraging high-quality care. Examples include accountable care organizations, bundled payments, and comprehensive primary care initiatives. Most of these new payment models are connected to quality or performance indicators and encourage provider collaboration. These payment mechanisms have been used extensively inside traditional Medicare. However, the cost of care delivery under Medicare Advantage programs is less than in traditional Medicare. Despite this, differences remain between the two programs. The Medicare Shared Savings Program and Medicare Advantage aim to enhance patient outcomes. However, their clinical risk profiles differ; hence, their charges vary. The study utilized data from two extensive surveys, which included information on enrollments in standard Medicare and Medicare Advantage. These surveys included samples of between 66,813 and 131,104 beneficiaries. Although these data are not available to the public, they are regarded as beneficial for predicting future usage patterns.
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