WASHINGTON – U.S. Senators Bill Cassidy, M.D. (R-LA) and Jeff Merkley (D-OR) introduced the No Unreasonable Payments, Coding, or Diagnoses for the Elderly (No UPCODE) Act to improve the way Medicare Advantage plans assess patients’ health risks and reduce overpayments for care. The No UPCODE Act will save taxpayers billions by eliminating incentives to overcharge Medicare for care.
“Medicare is going insolvent, and our budget deficit is expanding. We need to stop overpaying where we can if we’re to preserve Medicare for Americans who rely on it,” said Dr. Cassidy. “This is the direction we need to go.”
“Fraud, waste, and abuse by bad actors are destroying the stability of both Medicare Advantage and traditional Medicare—this must end,” said Senator Merkley. “Our bipartisan bill cracks down on the fraudsters overcharging taxpayers by billions of dollars every year, closing the loopholes they use to turn sick patients into healthy profits.”
Traditional Medicare plans reimburse providers for the cost of treatments rendered, while Medicare Advantage is paid a standard rate based on the health of an individual patient. Because of this, Medicare Advantage plans have a financial incentive to make beneficiaries appear sicker than they may be to receive a higher Medicare reimbursement. According to a CBO budget option report, addressing overcoding will save $124 billion over 10 years.
The No UPCODE Act would eliminate those incentives by:
- Developing a risk-adjustment model that uses two years of diagnostic data instead of just one year.
- Limiting the ability to use old or unrelated medical conditions when determining the cost of care.
- Ensuring Medicare is only charged for treatment related to relevant medical conditions.
- Closing the gap between how a patient is assessed under traditional Medicare and Medicare Advantage.
Background
Earlier this month, Cassidy discussed his No UPCODE Act during U.S. Centers for Medicare and Medicaid Services (CMS) Director nominee Mehmet Oz’s confirmation hearing before the U.S. Senate Finance Committee.
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