Press Releases: 2012

PRESS RELEASE: Stark Introduces Bill to Improve Savings, Accuracy in Medicare Advantage Payments to Private Insurers

Thursday, 22 March 2012 12:26

NEWS - CONGRESSMAN PETE STARK
239 Cannon House Office Building
Washington, DC 20515
(202) 225.5065
www.stark.house.gov

FOR IMMEDIATE RELEASE
March 22, 2012
Sarah Baldauf, (202) 225-3202

Stark Introduces Bill to Improve Savings, Accuracy in Medicare Advantage Payments to Private Insurers
Projected Savings Estimated to Top $20 Billion

WAHINGTON -- Today, Rep. Pete Stark (D-CA), Ranking Member on the Ways and Means Health Subcommittee, introduced the Medicare Advantage Program Integrity Act, H.R. 4254, to enhance program integrity in the Medicare Advantage program and ensure accurate plan payments.

The Medicare Advantage Program Integrity Act (MAPI) would ensure that Medicare Advantage (MA) payments to private insurers more accurately reflect the health status of their enrollees. It would also end the ability of these private insurers to game the system by holding Medicare pre-payments as investment income. Making these two simple changes would save more than $20 billion over 10 years, and further extend the Medicare Trust Fund. The legislation is based on recommendations from the Government Accountability office and the Health and Human Services Office of Inspector General.

Rep. Pete Stark: "Health reform goes a long way toward ending overpayments to private insurers in the Medicare Advantage program, but, as noted by the GAO and HHS Inspector General, there is more to be done. My bill would enact common sense reforms to ensure that taxpayers and Medicare beneficiaries get the best bang for their buck.”

Stark's legislation implements recommendations made by the Government Accountability Office in their January report, Medicare Advantage: CMS Should Improve the Accuracy of Risk Score Adjustments for Diagnostic Coding Practices, to ensure more accurate MA payments. The GAO found that the enrollee risk scores, which determine payment, are higher than those of comparable patients in traditional Medicare. This suggests that plans are erroneously classifying their patients.  GAO estimates that if proper adjustments were made to these payments, Medicare would have saved $1.2 to $3.1 billion in MA plan payments in 2010 alone.

The bill also implements the recommendation of the Health and Human Services Office of Inspector General (OIG) to delay pre-payments to Medicare Advantage plans as the Federal Employee Health Benefits Program does today. OIG conducted audits in 2000 and 2011 and found that if Medicare delayed its pre-payments to Medicare Advantage plans, Medicare Part A and B trust funds would have earned $450 million in interest in 2007, as opposed to private insurers keeping that interest income.

Judy Stein, Executive Director of the Center for Medicare Advocacy on the Medicare Advantage Program Integrity Act: "The Center for Medicare Advocacy supports the good government concepts put forward in the Medicare Advantage Program Integrity Act introduced by Mr. Stark. The bill will require adjustments in the amount of payments to Medicare Advantage plans to more accurately reflect the health status of their enrollees and in the timing of payments to more accurately reflect when the plans actually need the money to pay for services. The bill is a straightforward response to recommendations from the Government Accounting Office and the Office of Inspector General that will tighten Medicare operations, strengthen the Medicare Trust Funds and provide savings to the Medicare program without imposing greater burdens on Medicare beneficiaries and their families."

Supporters of the Medicare Advantage Program Integrity Act:

AFL-CIO
AFSCME
Alliance for Retired Americans
Center for Medicare Advocacy
Families USA
Medicare Rights Center
National Committee to Preserve Social Security and Medicare