\n\tMadison Czopek, PolitiFact and Yacob Reyes, PolitiFact<\/span><\/p>\n

\u201cIt\u2019s President Biden who is proposing to cut Medicare Advantage.\u201d<\/p>\n

Sen. Tom Cotton (R-Ark.) in a tweet on February 6, 2023<\/p>\n

More than 60 million people rely on Medicare for health coverage, and raising the alarm about potential cuts to the program is a perennial talking point among both Republicans and Democrats.<\/p>\n

On Feb. 6, Sen. Tom Cotton (R-Ark.) took a swing at President Joe Biden on Twitter after Biden tweeted that House Republicans were threatening to cut Social Security and Medicare.<\/p>\n

\u201cIt\u2019s President Biden who is proposing to cut Medicare Advantage, a program used by almost 4 in 10 Arkansas seniors,\u201d Cotton wrote.<\/p>\n

It wasn\u2019t clear from Cotton\u2019s tweet which Biden proposal he was referring to, and his office did not respond to requests for comment.<\/p>\n

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It’s President Biden who is proposing to cut Medicare Advantage, a program used by almost 4 in 10 Arkansas seniors. This would be a mistake. https:\/\/t.co\/2GFxa0AT7z<\/a><\/p>\n
\u2014 Tom Cotton (@TomCottonAR) February 6, 2023<\/a><\/p><\/blockquote>\n
Medicare Advantage<\/a>\u00a0policies, administered through Medicare-approved private insurance companies, bundle the traditional Medicare program\u2019s separate hospital, medical, and prescription drug coverage into one plan.<\/p>\n
The plans are optional and can\u00a0 lower out-of-pocket costs<\/a>\u00a0while offering other benefits, including vision and dental services, that are not included in the original Medicare program.\u00a0<\/p>\n
About 28 million people, or nearly half of those eligible for Medicare, were enrolled in Medicare Advantage plans in 2022, according to KFF<\/a>.<\/p>\n
The Centers for Medicare & Medicaid Services recently announced two proposed changes that could affect Medicare Advantage insurers:\u00a0<\/p>\n
\n
One is a\u00a0 rule change<\/a>, set to take effect April 3, that\u2019s intended to increase the government\u2019s ability to audit Medicare Advantage plans and recover past overpayments.\u00a0<\/li>\n
The other is an\u00a0 annual update<\/a>\u00a0that would modify Medicare Advantage\u2019s risk adjustment model, which determines how much the government pays insurers for beneficiaries\u2019\u00a0reported health conditions.\u00a0<\/li>\n<\/ul>\n
Health care policy experts said it is most likely that Cotton\u2019s tweet was referring to the\u00a0 rule change<\/a>\u00a0intended to increase the government\u2019s ability to recover overpayments.<\/p>\n
The rule change would return billions of dollars to the federal government and is likely to reduce private insurers\u2019\u00a0profits, though experts say the reductions would be minimal compared with overall spending.\u00a0<\/p>\n
Those companies might, in turn, increase enrollees\u2019\u00a0out-of-pocket costs or reduce benefits, experts said. But it is unclear if that will happen.\u00a0<\/p>\n
Meanwhile, the second change \u2014 an annual update to the rates paid to Medicare Advantage insurers \u2014 will reduce payments to Medicare Advantage insurers. But the reductions will be offset by other program modifications that are projected to yield a 1% increase in Medicare Advantage spending per person in 2024.<\/p>\n
A group that lobbies for Medicare Advantage plans sent a\u00a0 memo to lawmakers<\/a>\u00a0that said proposed changes would affect 30 million beneficiaries, Politico reported<\/a>.<\/p>\n
What Is the Proposed Rule Change to Medicare Advantage?<\/strong><\/p>\n
The federal government pays private insurance companies for Medicare Advantage per patient, making adjustments to the amounts based on the health of a beneficiary.<\/p>\n
The sicker a Medicare Advantage patient is, the more money a private insurer will receive from the federal government to cover the cost of care. Experts said there\u2019s been a longtime concern that Medicare Advantage insurers have a financial incentive to identify preexisting conditions among enrollees.<\/p>\n
Auditors from the federal government review medical files to confirm whether patients have the diseases that their private insurers listed, KHN has reported<\/a>. These audits showed that private insurers had listed conditions<\/a>\u00a0for patients that could not be verified, resulting in millions of dollars of overpayments to Medicare Advantage\u00a0insurers<\/a>.<\/p>\n
When overpayments are identified, private insurers\u00a0 must pay back<\/a>\u00a0the difference to the federal government.<\/p>\n
The administrative\u00a0 rule change<\/a>\u00a0that would allow the government to recoup overpayments is a new version of a rule proposed in 2018<\/a>, under the Trump administration. The final rule comes after the government spent years determining<\/a>\u00a0how to identify and recover overpayments, experts said.<\/p>\n
\u201cThe essence of this rule is to set up procedures whereby the Medicare program can recoup the overcharge,\u201d said Joseph Antos, a health policy expert at the American Enterprise Institute, a conservative-leaning think tank.<\/p>\n
From 2023 through 2032, estimates show<\/a>, the federal government will recover $4.7 billion in overpayments from major insurance companies including Humana, UnitedHealthcare, and Aetna. That money represents about one-fifth of 1% of federal payments to Medicare Advantage plans during that period,\u00a0 according to Dara Corrigan<\/a>, director of Medicare\u2019s Center for Program Integrity.<\/p>\n
Though the rule change is expected to reduce private health insurance companies\u2019\u00a0revenues from Medicare Advantage plans, the Department of Health and Human Services doesn\u2019t consider that to be a \u201ccut.\u201d\u00a0<\/p>\n
\u201cAuditing plans and recouping funds puts money back in the Medicare trust funds when big insurance companies get caught taking advantage of the Medicare program,\u201d Kamara Jones, a spokesperson for the department, told PolitiFact. This is about \u201cholding our seniors\u2019 health care to the standard they deserve.\u201d<\/p>\n
CMS is also required\u00a0 by<\/a>\u00a0 law<\/a>\u00a0to ensure accurate payments and prevent fraud, waste, and abuse.\u00a0<\/p>\n
Experts said they would not characterize the rule change as a \u201ccut.\u201d\u00a0<\/p>\n
The federal government is attempting to avoid paying more than it should, said Paul Ginsburg, a senior fellow at the University of Southern California Schaeffer Center for Health Policy and Economics. \u201cTo me, that is simply running the program better and more efficiently to protect the integrity of the federal funds being used for it.\u201d<\/p>\n
How Will Enrollees Be Affected?<\/strong><\/p>\n
It\u2019s difficult to determine whether Medicare Advantage enrollees will feel the rule changes.\u00a0<\/p>\n
\u201cMy read of the evidence is that reductions in payments to Medicare Advantage plans are largely borne by the plans themselves, either through lower profits or cost reductions,\u201d said Matthew Fiedler, a senior fellow with the University of Southern California-Brookings Schaeffer Initiative for Health Policy.<\/p>\n
A 2022 analysis<\/a>\u00a0from Avalere, a health care consulting company, found that the rule change could result in beneficiaries facing higher costs or fewer plan options or benefits.<\/p>\n
Because private insurers\u2019\u00a0profits will be reduced, companies could pass along those costs to enrollees in small ways, including slight increases in insurance premiums or out-of-pocket costs and, in some cases, fewer benefits, the American Enterprise Institute\u2019s Antos said.<\/p>\n
Antos said he did not expect drastic cost increases or benefit reductions that would encourage enrollees to turn to non-Medicare Advantage plans.<\/p>\n
CMS estimated<\/a>\u00a0that the other proposed 2024 updates to the way Medicare Advantage insurers will be paid will result in about a 3% reduction in payments to Medicare Advantage insurers in 2024. But the agency said that other modifications to the Medicare Advantage program would offset that reduction and yield a 1% increase in spending per person in 2024.<\/p>\n
An insurers\u2019\u00a0lobbying group said\u00a0CMS did not provide adequate information about how it arrived at the 1% figure. \u201cConsequently, there is no way to validate the accuracy\u201d of that estimate, a spokesperson said.<\/p>\n
The proposed 2024 adjustments are not a cut, but are part of \u201cthe routine annual process of implementing the law as far as how Medicare Advantage plans are paid,\u201d USC\u2019s\u00a0Ginsburg said.\u00a0<\/p>\n
Our Ruling<\/strong><\/p>\n
Cotton said, \u201cIt\u2019s President Biden who is proposing to cut Medicare Advantage.\u201d<\/p>\n
Experts said Cotton likely was referring to a recent rule change that allows the government to recover overpayments to insurers and is expected to reduce insurers\u2019\u00a0profits. Those companies might, in turn, raise enrollees\u2019\u00a0out-of-pocket costs or reduce benefits. It is unclear whether that will happen.\u00a0<\/p>\n
Another proposed change, an annual update to the rates paid to Medicare Advantage insurers, will reduce payments to insurers. But reductions will be offset by other changes that are expected to yield a 1% increase in payments to insurers per person in 2024.\u00a0<\/p>\n
Experts say it\u2019s inaccurate to characterize the changes as a \u201ccut\u201d to Medicare Advantage. We rate it False.<\/p>\n
PolitiFact researcher Caryn Baird contributed to this report.<\/em><\/p>\n
Sources<\/h4>\nTweet<\/a>\u00a0by Sen. Tom Cotton, Feb. 6, 2023<\/p>\n
Federal Register,\u00a0\u201c Medicare and Medicaid Programs; Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Program of All-Inclusive Care for the Elderly (PACE), Medicaid Fee-for-Service, and Medicaid Managed Care Programs for Years 2020 and 2021<\/a>,\u201d Feb. 1, 2023\u00a0<\/p>\n
The New York Times,\u00a0\u201c New Medicare Rule Aims to Take Back $4.7 Billion From Insurers<\/a>, Jan. 30, 2023<\/p>\n
Avalere,\u00a0\u201c Overview and Implications of CMS\u2019\u00a0Proposed Changes to MA RADV<\/a>,\u201d Aug. 23, 2022<\/p>\n
Axios,\u00a0\u201c Biden Administration Seeks to Recoup $4.7 Billion From Medicare Advantage Plans<\/a>,\u201d Jan. 30, 2023<\/p>\n
KHN,\u00a0\u201c CMS Signals That Medicare Advantage Payments Will Decline in 2024<\/a>,\u201d Feb. 2, 2023\u00a0<\/p>\n
KFF,\u00a0\u201c Medicare Advantage 2023 Spotlight: First Look<\/a>,\u201d Nov. 10, 2022<\/p>\n
KFF,\u00a0\u201c What to Know About Medicare Spending and Financing<\/a>,\u201d Jan. 19, 2023<\/p>\n
Stat,\u00a0\u201c Biden Administration Floats Major 2024 Pay Cut for Medicare Advantage Plans<\/a>,\u201d Feb. 1, 2023<\/p>\n
Fierce Healthcare,\u00a0\u201c Proposed Changes to Medicare Advantage Audits Could Put Insurers on the Hook for Billions<\/a>,\u201d Oct. 29, 2018<\/p>\n
Centers for Medicare &\u00a0Medicaid Services,\u00a0\u201c Medicare Learning Network Fact Sheet<\/a>,\u201d accessed Feb. 9, 2023<\/p>\n
NPR,\u00a0\u201c Hidden Audits Reveal Millions in Overcharges by Medicare Advantage Plans<\/a>,\u201d Nov. 21, 2022<\/p>\n
KHN,\u00a0\u201c Medicare Failed to Recover up to $125 Million in Overpayments, Records Show<\/a>,\u201d Jan. 6, 2017<\/p>\n
Fierce Healthcare,\u00a0\u201c Medicare Advantage Plans Lose Out in Final RADV Audit Rule That Ditches Fee-for-Service Adjuster<\/a>,\u201d Jan. 30, 2023<\/p>\n
Interview with Joseph Antos, senior fellow and Wilson H. Taylor scholar in health care and retirement policy at the American Enterprise Institute, Feb. 9, 2023<\/p>\n
Interview with Matthew Fiedler, senior fellow with the University of Southern California-Brookings Schaeffer Initiative for Health Policy, Feb. 9, 2023<\/p>\n
Statement from\u00a0 Kamara Jones, U.S. Department of Health and Human Services spokesperson, Feb. 9, 2023<\/p>\n
Interview with Jeannie Fuglesten Biniek, associate director of the Program for Medicare policy at KFF, Feb. 9, 2023<\/p>\n
Interview with Bowen Garrett, senior fellow in the Health Policy Center at the Urban Institute, Feb. 9, 2023<\/p>\n
Interview with Paul Ginsburg, senior fellow at the University of Southern California Schaeffer Center for Health Policy and Economics and a professor of health policy at the University of Southern California Price School of Public Policy, Feb. 9, 2023<\/p>\n
Centers for Public Integrity,\u00a0\u201c Medicare Advantage Audits Reveal Pervasive Overcharges<\/a>,\u201d Aug. 29, 2016<\/p>\n
Assistant Secretary for Planning and Evaluation,\u00a0\u201c Medicare Beneficiary Enrollment Trends and Demographic Characteristics<\/a>,\u201d published March 2022\u00a0<\/p>\n
KFF,\u00a0\u201c A Snapshot of Sources of Coverage Among Medicare Beneficiaries in 2018<\/a>,\u201d March 23, 2021<\/p>\n
Centers for Medicare &\u00a0Medicaid Services,\u00a0\u201c Medicare Advantage Risk Adjustment Data Validation Final Rule (CMS-4185-F2) Fact Sheet<\/a>,\u201d Jan. 30, 2023<\/p>\n
Centers for Medicare &\u00a0Medicaid Services,\u00a0\u201c Advance Notice of Methodological Changes for Calendar Year (CY) 2024 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies<\/a>,\u201d Feb. 1, 2023<\/p>\n
Centers for Medicare &\u00a0Medicaid Services,\u00a0\u201c What\u2019s a Medicare Advantage Plan?<\/a>\u201d published April 2015<\/p>\n
Medicare.gov,\u00a0\u201c Things to Know About Medicare Advantage Plans<\/a>,\u201d accessed Feb. 14, 2023<\/p>\n
Social Security Administration, Social Security Act:\u00a0 \u201cContracts With Medicare+Choice Organization,\u201d Sec. 1857<\/a>, accessed Feb. 14, 2023<\/p>\n
Social Security Administration, Social Security Act:\u00a0\u201c Medicare and Medicaid Program Integrity Provisions,\u201d Sec. 1128J<\/a>, accessed Feb. 14, 2023<\/p>\n
Social Security Administration,\u00a0Social Security Act: \u201c Contracts With Medicare Choice Organization,\u201d Sec. 1859<\/a>, accessed Feb. 14, 2023<\/p>\n
Politico,\u00a0\u201c GOP Tries to Flip the Medicare Script<\/a>,\u201d Feb. 8, 2023<\/p>\n<\/div>\n