BMA FACT CHECK: Responding to Kaiser Health News Story on “Overcharges” in Medicare Advantage

CLAIM:

• A Kaiser Health News story published today claims that “federal audits reveal widespread overcharges and other errors in payments to Medicare Advantage.”

FACTS:

• The data used in Kaiser Health News’ story is, in some cases, more than a decade old – reflecting information from 2011 to 2013. While the story focuses on alleged “overpayments,” audits also show many plans were underpaid by as much as $773 per patient.
• More recent research demonstrates Medicare Advantage’s affordability and responsible stewardship of Medicare dollars,
  • An October 2021 Milliman report concludes “the federal government pays less and gets more for its dollar in MA than in FFS.”  Milliman’s analysis found that per-member, per-month spending in Medicare Advantage is nearly $7 lower than per-member, per-month spending for beneficiaries of a similar health status in FFS Medicare ($942.43 in Medicare Advantage vs. $949.39 in FFS Medicare).
  • The Department of Health and Human Services’ Fiscal Year 2021 report shows that the net improper payment rate in Medicare Advantage was roughly half that of FFS Medicare (3.18% in Medicare Advantage vs. 6.04% in FFS Medicare).
• Medicare Advantage demonstrates superior outcomes over FFS Medicare.
  • Medicare Advantage beneficiaries had higher rates of vaccination for pneumonia and the flu, were more likely to receive needed cancer screenings and risk falls assessments, and ultimately had a 43% lower rate of avoidable hospitalizations for any condition and a 5% lower rate of all-cause readmissions compared to Medicare FFS.
• Medicare Advantage’s value-based payment model relies on a complete, thorough record or coding of each beneficiary to holistically manage health care. The incentive to accurately capture diagnoses does not exist in FFS Medicare.
  • Data suggests that Medicare Advantage’s value-based model more accurately identifies and treats chronic conditions, better coordinates care for seniors with complex illnesses, and proactively addresses social determinants of health. For example, a recent JAMA study found lower rates of hospital stays, emergency room visits, and 30-day readmissions in Medicare Advantage compared to FFS Medicare.
• Kaiser Health News’ story largely ignored the consumer perspective – failing to note that beneficiaries in Medicare Advantage save nearly $2,000 per year compared to FFS Medicare, or that they give this vital part of the Medicare program a 94% satisfaction rate.

BMA’S TAKE: “Medicare Advantage is the choice of more than 29 million diverse Americans for their health coverage. It delivers better care and better outcomes in part because of its value-based payment model that relies on accurate and thorough records of each beneficiary’s health status,” said Mary Beth Donahue, President and CEO of the Better Medicare Alliance. “While this data is more than a decade old, more recent research demonstrates Medicare Advantage’s affordability and responsible stewardship of Medicare dollars: delivering lower per-beneficiary government spending and a lower net improper payment rate than fee-for-service Medicare – even as Medicare Advantage beneficiaries report saving nearly $2,000 per year.”