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Medicare Advantage insurers face new curbs on overcharges in Trump plan
Dr. Mehmet Oz leads the Centers for Medicare & Medicaid Services. A CMS plan to keep payments to Medicare Advantage flat in 2027 roiled health insurance stocks this week.
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Anna Moneymaker/Getty Images
Medicare Advantage health plans are blasting a government proposal this week that would keep their reimbursement rates flat next year while making other payment changes.
But some health policy experts say the plan could help reduce billions of dollars in overcharges that have been common in the program for more than a decade.
On Jan. 26, Centers for Medicare & Medicaid Services officials announced they planned to raise rates paid to health plans by less than a tenth of a percent for 2027, far less than the industry expected. Some of the largest, publicly traded insurers, such as UnitedHealth Group and Humana, saw their stock prices plummet as a result, while industry groups threatened that people 65 and older could see service cuts if the government didn’t kick in more money.
In Medicare Advantage, the federal government pays private insurance companies to manage health care for people who are 65 and older or disabled.
“Chart reviews”
Less noticed in the brouhaha over rates: CMS also proposed restricting plans from conducting what are called “chart reviews” of their customers. These reviews can result in new medical diagnoses, sometimes including conditions patients haven’t even asked their doctors to treat, that increase government payments to Medicare Advantage plans.
The practice has been criticized for more than a decade by government auditors who say it has triggered billions of dollars in overpayments to the health plans. Earlier this month, the Justice Department announced a record $556 million settlement with the nonprofit health system Kaiser Permanente over allegations the company added about half a million diagnoses to its Advantage patients’ charts from 2009 to 2018, generating about $1 billion in improper payments.
KP did not admit any wrongdoing as part of the settlement.
“I do think the administration is serious about cracking down on overpayments,” said Spencer Perlman, a health care policy analyst in Bethesda, Maryland.
Perlman said that while the Trump administration strongly supports Medicare Advantage, officials are “troubled” by plans that rake in undue profits by using chart reviews to bill the government for medical conditions even when no treatment was provided.
In a news release, CMS Administrator Mehmet Oz said curbing this practice would ensure more accurate payments to the plans while “protecting taxpayers from unnecessary spending that is not oriented towards addressing real health needs.”
“These proposed payment policies are about making sure Medicare Advantage works better for the people it serves,” Oz said.
Richard Kronick, a former federal health policy researcher and a professor at the University of California-San Diego, called the proposal “at least a mildly encouraging sign,” though he said he suspected health plans might eventually find a way around it.
Kronick has argued that switching seniors to Medicare Advantage plans has cost taxpayers tens of billions of dollars more than keeping them in the government-run Medicare program, because of unbridled medical coding excesses. The insurance plans have grown dramatically in recent years and now enroll about 34 million members, or more than half of people eligible for Medicare.
David Meyers, an associate professor at the Brown University School of Public Health, called the proposed restriction on chart reviews “a step in the right direction.”
“I think the administration has been signaling pretty strongly they want to cut back on inefficiencies,” he said.
The outcry from industry, mostly directed at the proposal to essentially hold Medicare Advantage payment rates flat, was quick and sharp.
“If finalized, this proposal could result in benefit cuts and higher costs for 35 million seniors and people with disabilities when they renew their Medicare Advantage coverage in October 2026,” said Chris Bond, a spokesperson for AHIP, formerly known as America’s Health Insurance Plans.
CMS is accepting public comments on the proposal and says it will issue a final decision on the payment rates and other provisions by early April.
Meyers said health plans often claim they will be forced to slash benefits when they aren’t satisfied with CMS payments. But that rarely happens, he said.
“The plans can still make money,” he said. “They mostly are very profitable, just not as profitable as shareholders expected.”
The government pays Medicare Advantage plans higher rates to cover sicker patients. But over the past decade, dozens of whistleblower lawsuits, government audits, and other investigations have alleged that health plans exaggerate how sick their customers are to pocket payments they don’t deserve, a tactic known in the industry as “upcoding.”
Many Medicare Advantage health plans have hired medical coding and analytics consultants to review patients’ medical charts to find new diagnoses that they then bill to the government. Medicare rules require that health plans document — and treat — all medical conditions they bill.
Yet federal audits have shown for years that many health plans’ billing practices don’t hold up to scrutiny.
A December 2019 report by the Department of Health and Human Services inspector general found that the health plans “almost always” used chart reviews to add, rather than delete, diagnoses. “Over 99 percent of chart reviews in our review added diagnoses,” investigators said.
The report found that diagnoses reported only on chart reviews — and not on any service records — resulted in an estimated $6.7 billion in payments for 2017.
This week’s proposal is not the first time CMS has tried to crack down on chart reviews.
In January 2014, federal officials drafted a plan to restrict the practice, only to abruptly back off a few months later amid what one agency official described as an “uproar” from the industry.
The health insurance industry has for years relied on aggressive lobbying and public relations campaigns to fight efforts to rein in overpayments or otherwise reduce taxpayers’ costs for Medicare Advantage.
What happens this time will say a lot about the seriousness of the Trump administration in its crack down on controversial, long-standing payment practices in the program.
Perlman, the policy analyst, said it is “quite common” for CMS to partially backtrack when faced with opposition from the industry, such as by phasing in changes over several years to soften the blow on health plans.
David Lipschutz, an attorney with the Center for Medicare Advocacy, a nonprofit public interest law firm, said finalizing the chart review proposal “would be a meaningful step towards reining in overpayments to Medicare Advantage plans.
“But in the past, he said, even a minor change to Advantage payments has led the industry to protest that “the sky will fall as a result, and the proposal is usually dropped.”
“It’s hard to tell at this stage how this will play out,” Lipschutz said.
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF.
At least two structural columns buckled and failed in a 37-story office tower in Midtown Manhattan on Tuesday, prompting evacuations of nearby streets and buildings. While city officials asserted that the tower was in no danger of collapsing completely, outside engineers said further failures in the structure could not be ruled out.
A pair of columns that failed completely were part of the tower’s existing structure. A New York Times review of images and videos from inside the building has found that several floors were added atop these columns.
City officials said in a news conference on Tuesday that the building was continuing to move, while they simultaneously assured the city that the building would not suffer “total collapse.” “The way this building is constructed, it’s a steel-frame building,” John Esposito, a chief in the Fire Department in New York, said at the afternoon news conference. “So, it would not be a total collapse. It would be more of a localized collapse.” Still, he said, “that remains our concern, that it’s moved.”
Engineers said that the movement itself was cause for concern. In a properly designed steel building, they said, loads should redistribute quickly to surviving structural supports if columns failed.
Joe DiPompeo, a former president of the Structural Engineering Institute at the American Society of Civil Engineers, said that if the structure had been overloaded, he would expect any movement “to happen very quickly,” rather than gradually.
“Generally when a column buckles, it’s a sudden failure,” Mr. DiPompeo said. He said that a full collapse remained unlikely given the redundancies built into the building codes.
Engineers often refer to the most dangerous possibility as a progressive collapse, a process in which structures near the initial failure become overstressed and also fail, potentially bringing down the building if the sequence continues. While unlikely, it cannot be ruled out, Mr. DiPompeo said.
Footage recorded from inside the building shows at least two structural columns appear to have failed completely, Mr. DiPompeo said. Other nonstructural, interior walls — or at least the metal “studs” that were in place to hold them up — also appear to have deformed.
“The only way that really happens is if the floor above them dropped. It looks like the floor above could have dropped a foot or two, which is obviously not a good situation,” Mr. DiPompeo said.
The 37-story building is in the process of being converted from office space into residential units. Four new floors and a large vertical portion were added onto the existing building in recent months. The vertical portion consists of a stack of over a dozen new floors cantilevered out over the existing building below.
Engineers said that there was nothing inherently wrong with adding residential floors or the cantilevered section above the columns that failed, as long as the original structure and the modifications had properly accounted for the added weight and wind loads.
“The cantilever alone doesn’t change anything,” Mr. DiPompeo said, but it does put additional load on the columns underneath — a factor that should have been reflected in the design.
Nathan Berman, managing principal and founder of MetroLoft, the developer overseeing the conversion, said on Tuesday that “this incident is nothing more than a typical construction mishap.”
He said two columns near the northwest corner of the tower had bent under the weight of additions to the building above, most likely because those columns had not been properly reinforced, though he said an investigation would determine the cause. The rest of the columns, he said, “picked up the weight.” He estimated the affected floors above the failed columns had sagged by a maximum of four inches.
Mr. Berman said that he expected the problems to be fixed and the project to be completed with, at most, a slight delay.
On Tuesday evening, installation of temporary shoring was set to begin shortly, in order to help stabilize the 20th and 21st floors of the building.
The Justice Department sent letters warning election officials in all 50 states and the District of Columbia that they could face criminal prosecution over noncitizen voting, a spokesperson for the Justice Department confirmed Tuesday.
The letters, signed by Assistant Attorney General Harmeet Dhillon, who heads up the department’s Civil Rights Division, give states five days to explain how they will comply with federal voter eligibility laws and how they will maintain “clean voter lists.”
“The Department sent these letters to all 50 states and the District of Columbia, asking for voluntary compliance in a timely manner with their obligations under federal law to ensure only citizens vote in federal elections,” a Justice Department spokesperson said in a statement.
Noncitizen voting in federal elections is extremely rare, but Trump and his administration have falsely portrayed it as a widespread issue.
Michigan Secretary of State Jocelyn Benson, Nevada Secretary of State Francisco Aguilar and Utah Lt. Gov. Deidre Henderson are among those who said they received the letters from the Justice Department.
The letters say state election officers “could be criminally prosecuted for aiding and abetting” noncitizen voting. They further specify that any election officer who knowingly retains noncitizens on a statewide voting registration list or who facilitates noncitizens’ receiving and casting ballots could be subject to criminal liability.
“An intentional act that is aimed at diluting the votes of citizens could also constitute a violation” of federal law, the letters said.
Henderson wrote on social media that the threats constitute “truly bizarre behavior.”
“Got another love letter this morning from the DOJ sprinkled throughout with threats of criminal prosecution,” she wrote. “I’m sure I’m not the only chief election officer of a state who is being targeted for following state and federal laws by resisting DOJ’s demands for private voter data that have thus far been ruled illegal by at least a dozen courts.”
The letters are the latest move in the Justice Department’s campaign to assert more federal control over state elections.
While some states have complied with the administration’s demands that they hand over voter roll data, the Justice Department has sued 30 states and Washington, D.C., for resisting. So far, 11 different federal courts have dismissed the Justice Department’s efforts to seize voter rolls.
Lionel Messi #10 of Argentina celebrates scoring his team’s second goal during their World Cup match against Egypt in Atlanta on Tuesday.
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Elsa/Getty Images
They looked beaten. And out. Argentina, the defending World Cup champion and No. 1-ranked team, was down 2-0 late against Egypt.
Then, in a span of 13 remarkable minutes, Argentina scored not once, not twice, but three times, capping a comeback for the ages and leaving Egypt stunned and shellshocked.
For much of the game in Atlanta, Egypt was in control, hobbling Argentina early. The Egyptian attack began almost immediately with a stunning header goal delivered by Yasser Ibrahim in the 15th minute. After that, Egypt’s defense closed ranks, making it practically impossible for Argentina to equalize.
It was downhill from there for the Argentines: team captain Lionel Messi failed to convert a penalty kick, and in the 67th minute, Egypt got a second goal from Mostafa Ziko (after an earlier Egyptian goal had been disallowed after a video review). It looked like Argentina was finished. On the brink of elimination.
But no one told the Argentine players that.
In the 79th minute, Lionel Messi began doing his thing. He fired a cross near the Egyptian goal, and Cristian Romero headed it in. Messi was not done. Four minutes later, he powered a shot past the Egyptian keeper. It was his eighth goal of this tournament, the most of any player. The score was 2-2.
Then, in stoppage time, yet another Argentina header and another goal, this time from Enzo Fernandez.
“This is the World Cup for you,” said Messi after the game. “It wasn’t easy to come back from two goals down. But as I always say, this group never gives up. We always try to fight until the end.”
French referee François Letexier speaks with Egypt forward Mohamed Salah during the World Cup Round of 16 match between Argentina and Egypt in Atlanta.
Roberto Schmidt/AFP via Getty Images
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Roberto Schmidt/AFP via Getty Images
Afterward, Egypt coach Hossam Hassan complained about the French referee and the officiating. “I am not convinced. I am not convinced with this outcome. I’m not convinced with the way things unfolded during this match,” said Hassan in a post-match news conference. “We have been treated unfairly today. We have suffered injustice.”
“We would have deserved to earn this win, but we are leaving with honor, with pride, regardless of this defeat,” said Hossan.
African soccer teams have been the stars of this World Cup. Morocco has yet to lose a game. Cape Verde qualified for the first time in its history and stymied Spain, Uruguay and Saudi Arabia. Argentina barely beat them in a nail-biter of a match.
For Egypt, getting this far in the tournament is historic in itself: it’s the first time the team has made it this far. For Argentina, it was a terrifying yet relieving victory: several players, including Messi himself, cried after the game.
Next, they move to the quarterfinals and will play the winner of today’s Switzerland-Colombia match.
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