Illustration: Annelise Capossela / Axios
A proposal aimed at cracking down on overpayments to Medicare Advantage insurers is gaining momentum with backing from key committee leaders.
Why it matters: Addressing "upcoding" by MA plans could save the government tens of billions of dollars and serve as a bipartisan rallying point, though industry pushback is likely to be fierce.
Driving the news: Senate HELP Chair Bill Cassidy's No UPCODE Act seeks to address some MA plans' practice of classifying patients as sicker in order to receive higher payments. His office, citing past CBO estimates, says it could save as much as $124 billion over 10 years.
- The proposal received a burst of attention when it was considered for the GOP reconciliation bill.
- Backers are now eyeing other vehicles, including a year-end health package, if one materializes.
Senate Finance Chair Mike Crapo told reporters Tuesday that he backs the bill. "I was hopeful we could do it in the reconciliation bill; we weren't able to put it in," he said. He did not specify a path forward.
- At a Tuesday hearing, House Ways and Means Chair Jason Smith, without mentioning specific legislation, also called out "concerns about MA plans inflating a patient's level of sickness, resulting in higher reimbursements for the plan at taxpayer expense."
Between the lines: Savings from MA have bipartisan appeal, unlike the changes to Medicaid that the GOP pursued in reconciliation.
- Leading Democrats urged their GOP counterparts during the reconciliation debate to target MA practices like upcoding rather than Medicaid.
- Senate Finance Committee Ranking Member Ron Wyden told Axios on Tuesday he thinks upcoding is a "blatant rip-off" and that he will "look at all the possible vehicles to get it done."
Yes, but: Changes to MA can be characterized as "Medicare cuts" and prove politically incendiary heading into the midterms.
- That could be too much for lawmakers still bruised by the bitter reconciliation debate, who'd also open themselves up to attacks from the insurance industry.
- There is also the real prospect of legislative gridlock that results in just a bare-bones health extender package.
What they're saying: "The president and congressional leaders made a promise to seniors that there would be no cuts to Medicare," said Chris Bond, a spokesperson for America's Health Insurance Plans.
- "The No UPCODE Act would break that promise and lead to higher costs and reduced benefits for nearly 35 million seniors and individuals with disabilities who rely on the program."
- The Better Medicare Alliance, a pro-MA advocacy group, pushed back on the upcoding bill by saying that "stable, predictable payments are critical to sustaining Medicare Advantage's investments in coordinated care, supplemental benefits, and chronic disease management."
What's next: "I think we'll have a package of health care bills by the end of the year, and that should be one of them," said Sen. Roger Marshall, referring to the Cassidy bill.
- "There's no guarantee," Cassidy told Axios of the inclusion of his bill in a health package. "But it's bipartisan."
