RISE summarizes recent regulatory-related headlines.
Lawmakers call for jury trial in UnitedHealth MA upcoding case
U.S. Rep. Pramila Jayapal (D-Seattle) is leading dozens of members in filing an amicus brief in a case against UnitedHealth, alleging that the insurer uses inaccurate diagnosis codes to inflate Medicare Advantage (MA) payments.
Jayapal states that UnitedHealth knew that it received $2.1 billion in payments due to incorrect diagnoses but did nothing to correct the error.
Although MA was initially created to save taxpayer dollars, it does the exact opposite, she said in a statement. “This program is simply a cash cow for big insurance corporations at the cost of seniors and people with disabilities. UnitedHealth must answer to a jury to the allegations that its network of MA plans intentionally ‘upcoded’ to increase the payments it received from Medicare taxpayer dollars that did not go to provide health care to patients but rather to pad UnitedHealth’s profits. Americans deserve to know if Medicare funds have been—and could continue to be—abused.”
Jayapal said overpayments to MA insurers threaten the stability of the entire Medicare program for the 65 million Americans who rely on it. UnitedHealth is the nation’s largest insurer of MA plans, with 28 percent of the market share nationally and $400 billion in revenue last year.
Judge denies Florida Blue’s request to change MA Star rating
A federal judge has denied Blue Cross and Blue Shield of Florida’s motion to have its Medicare Advantage Star rating adjusted due to severe flooding in April 2023 that impacted its operations. The insurer argued that the Extreme and Uncontrollable Circumstances Rule allows Medicare insurance plans to avoid a reduction of their Star ratings when extreme and uncontrollable circumstances negatively affect operational and clinical systems. Although Florida Governor Ron DeSantis declared a state of emergency and then President Joe Biden declared a major emergency existed, Xavier Becerra, who served as secretary of the Department of Health and Human Services (HHS) at the time, did not declare a public health emergency for Broward County. Florida Blue said that if the Centers for Medicare & Medicaid Services (CMS) had made an adjustment for the extreme and uncontrollable circumstances, its Star rating for calendar year 2025 would be higher. But Judge Amit Mehta, of the U.S. District Court for the District of Columbia ruled last week that CMS was neither arbitrary nor capricious when it decided against a public health emergency for the flooding.
Altman: Federal proposals could lead to a significant drop in ACA marketplace enrollment
In his latest column, KFF President and CEO Drew Altman warns that a combined effect of technical federal proposals could reduce enrollment in the Affordable Care Act (ACA) marketplace by one-third. Among the upcoming changes that could impact enrollment are the expiration of enhanced ACA tax credits, which will automatically end if Congress doesn’t take action to extend them, and provisions from the House reconciliation bill. Combined with other proposals developed in the Ways and Means Committee, marketplaces could face a drop in coverage of about eight million people, he said.
“A cut in coverage even close to this magnitude in the marketplaces would also result in financial hardship for millions of low-income people and destabilize some smaller state marketplaces or possibly lead to them closing up shop,” Altman wrote.
The potential cuts are not drawing much attention due to the spotlight on potential Medicaid cuts in the reconciliation bill, but Altman urges the Congressional Budget Office to look at the policies and score the impact on coverage in the marketplace.
AHIP: 5 trends in Medicare Supplement insurance
A new AHIP report, which examines trends in Medicare Supplement insurance, has found that fee-for-service Medicare enrollees who chose a Medicare Supplement plan rose to 41.9 percent in 2023. It is the fifth consecutive year there has been an increase.
The new report describes the various types of Medicare Supplement plans, the demographics of who chooses to enroll in these plans, which are the fastest-growing plans, and how enrollment breaks down state by state.
Here are five key takeaways from the report:
- The percentage of fee-for-service Medicare enrollees purchasing Medicare Supplement coverage grew from 36.8 percent to 41.9 percent between December 2018 and December 2023.
- More than half (56 percent) of all fee-for-service Medicare enrollees without any additional coverage chose a Medicare Supplement plan in 2021.
- Fee-for-service Medicare enrollees without Medicare Supplement were two times more likely to have problems paying medical bills compared to enrollees with Medicare Supplement policies. Three percent of enrollees with Medicare Supplement coverage reported having difficulty paying medical bills in the last 12 months, compared to 6 percent of fee-for-service Medicare enrollees without Medicare Supplement coverage.
- A majority of Medicare Supplement policyholders (54 percent) are women, while 43 percent are 75 years old or older.
- A significant percentage of Medicare Supplement enrollees are people with lower incomes. For example, 17 percent have incomes below $30,000.
HHS takes steps to implement President Trump’s executive order to lower drug costs
The U.S. Department of Health and Human Services (HHS) announced this week that it will take immediate action to implement President Trump’s executive order to lower drug costs in the United States. The administration has identified specific targets that pharmaceutical manufacturers must meet to satisfy the requirements of the executive order. The actions are meant to ensure that Americans no longer pay more for medications than patients in other economically comparable countries.
“For too long, Americans have been forced to pay exorbitant prices for the same drugs that are sold overseas for far less,” HHS Secretary Robert F. Kennedy Jr. said in the announcement. “That ends today. We expect pharmaceutical manufacturers to fulfill their commitment to lower prices for American patients, or we will take action to ensure they do.”
HHS expects each manufacturer to commit to aligning US pricing for all brand products across all markets that do not currently have generic or biosimilar competition with the lowest price of a set of economic peer countries. These targets will drastically bring down U.S. drug prices, which are often three to five times higher than prices abroad, while preserving innovation by simply ensuring that Americans bear no greater burden than patients receiving the same drugs in other countries.