A recent Kaiser Health News article revealed that federal audits found widespread overcharges and other errors in payments to Medicare Advantage (MA). But the Better Medicare Alliance, a research and advocacy organization that supports MA, argues that the data used in the article is more than a decade old and the same audits also show many plans were underpaid.
In a BMA fact check, the organization states that the data used is based on information from 2011 to 2013. The article, which RISE republished on November 21, was based on 90 audits that KHN obtained through a three-year Freedom of Information Act lawsuit. It found that some plans overbilled the government more than $1,000 per patient a year on average.
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“While the story focuses on alleged ‘overpayments,’ audits also show many plans were underpaid by as much as $773 per patient,” BMA said in the fact check, adding that more recent research shows MA’s “affordability and responsible stewardship of Medicare dollars.”
Indeed, BMA points to an October 2021 Milliman report that found that per-member, per-month spending in MA is nearly $7 lower than per-member, per-month spending for beneficiaries of a similar health status in fee-for-service (FFS) Medicare ($942.43 in MA vs. $949.39 in FFS Medicare). And the Department of Health and Human Services’ Fiscal Year 2021 report shows that the net improper payment rate in MA was roughly half that of FFS Medicare (3.18 percent in MA vs. 6.04 percent in FFS Medicare).
MA demonstrates superior outcomes over FFS Medicare, according to BMA. For instance, beneficiaries who 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 percent lower rate of avoidable hospitalizations for any condition and a five percent lower rate of all-cause readmissions compared to Medicare FFS. MA follows a value-based payment model that relies on a complete, thorough record or coding of each beneficiary to holistically manage health care.
Data also suggests the MA model more accurately identifies and treats chronic conditions, better coordinates care for seniors with complex illnesses, and proactively addresses social determinants of health. A recent JAMA study found lower rates of hospital stays, emergency room visits, and 30-day readmissions in MA compared to FFS Medicare.
The KHN story largely ignored the consumer perspective and failed to note that MA beneficiaries save nearly $2,000 per year compared to FFS Medicare, according to BMA. “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," said Mary Beth Donahue, president and CEO of the BMA.