Medicare Advantage health plans are blasting a government proposal this week that would keep their reimbursement rates flat next year while making other payment changes.
But some health policy experts say the plan could help reduce billions of dollars in overcharges that have been common in the program for more than a decade.
On Jan. 26, Centers for Medicare & Medicaid Services officials announced they planned to raise rates paid to health plans by less than a tenth of a percent for 2027, far less than the industry expected. Some of the largest, publicly traded insurers, such as UnitedHealth Group and Humana, saw their stock prices plummet as a result, while industry groups threatened that people 65 and older could see service cuts if the government didn’t kick in more money.
In Medicare Advantage, the federal government pays private insurance companies to manage health care for people who are 65 and older or disabled. But less noticed in the brouhaha over rates: CMS also proposed restricting plans from conducting what are called “chart reviews” of their customers. These reviews can result in new medical diagnoses, sometimes including conditions patients haven’t even asked their doctors to treat, that increase government payments to Medicare Advantage plans.
The practice has been criticized for more than a decade by government auditors who say it has triggered billions of dollars in overpayments to the health plans. Earlier this month, the Justice Department announced a record $556 million settlement with the nonprofit health system Kai …