The Centers for Medicare & Medicaid Services (CMS) has announced a new initiative under President Donald Trump‘s administration that seeks to recover billions of dollars in improper payments made to Medicare Advantage plans.
The strategy represents an “aggressive” escalation in the federal government’s overview of the privately run plans, which serve more than 32 million Americans.
Newsweek has contacted CMS outside regular hours for comment via email.
Why It Matters
Medicare Advantage plans are risk-adjusted payments based on the diagnoses of enrollees, so those with more serious or chronic conditions receive higher payments.
Medicare Advantage has expanded significantly over the past decade, and between 2023 and 2024, total Medicare Advantage enrollment grew by about 7 percent, KFF reported.
The Congressional Budget Office projected that the share of all Medicare beneficiaries enrolled in Medicare Advantage plans would rise to 64 percent by 2034, up from 54 percent in 2024. The program has also drawn criticism for oversight gaps that can lead to overbilling. CMS has said it is “years behind” completing audits for Medicare Advantage plans.
A stock image of a Medicare card.
A stock image of a Medicare card.
Jenny Kane/AP
What To Know
The revised protocol allows CMS to extrapolate audit findings to recover payments on a broader scale. The last effort to recover overpayments was in 2007.
Alongside overseeing all Medicare Advantage contracts for each payment year in all newly initiated audits, CMS is set to invest additional resources to expedite the completion of audits for the payment years between 2018 and 2024.
To check the accuracy of patient claims of diagnoses on Medicare Advantage plans, CMS said it would conduct risk adjustment data validation audits to “confirm that diagnoses used for payment are supported by medical records.”
According to CMS, the Medicare Payment Advisory Commission estimated that Medicare Advantage plans could overbill the government by about $43 billion per year.
To bring about its new plan, CMS said it would deploy advanced systems to “efficiently review medical records and flag unsupported diagnoses.”
It also plans to increase the number of staff working on the audits, who manually verify flagged diagnoses, from 40 to about 2,000 by September 1.
CMS said it would also up its audits from about 60 Medicare Advantage plans a year to all eligible Medicare Advantage plans each year in all newly initiated audits, which is about 550 plans.
What People Are Saying
Dr. Mehmet Oz, the administrator of the Centers for Medicare & Medicaid Services, said in a news release: “We are committed to crushing fraud, waste and abuse across all federal healthcare programs. While the Administration values the work that Medicare Advantage plans do, it is time CMS faithfully executes its duty to audit these plans and ensure they are billing the government accurately for the coverage they provide to Medicare patients.”
What Happens Next
The Trump administration plans to complete all audits of health claims for Medicare Advantage plans between the payment years of 2018 and 2024 by early 2026.