Medicare Rights Applauds CMS Efforts to Reduce Medicare Advantage Overpayments

The 2024 Advance Notice released today by the Centers for Medicare & Medicaid Services (CMS) makes small but important adjustments to Medicare Advantage (MA) payment methodology. The Medicare Rights Center welcomes the provisions that would begin to rein in soaring, unnecessary MA costs and urges additional, comprehensive reforms.

CMS projects its updates will increase MA payments by 3.32% in 2024. Though greater than initially proposed, this is a lower growth rate than in recent years—an essential step towards correcting the decades-long problem of MA overpayments.

The amounts inappropriately paid to MA plans are significant. The Medicare Payment Advisory Committee cataloged $140 billion in overpayments during the past 12 years, and CMS estimates that in 2021 alone, plans improperly received $23 billion.  

Independent research consistently finds these excess payments are negatively impacting Medicare’s finances and long-term sustainability, as well as driving up beneficiary premiums and taxpayer costs. Addressing this wasteful spending becomes more urgent by the day. Expert analysis indicates overpayments will only grow as MA plan and enrollment numbers do, and both are surging. CMS’ actions are largely responsive to these realities, and to concerns many current and future beneficiaries have about rising Medicare costs, the program’s future, and the need for solutions.

We applaud CMS for finalizing a 2024 Advance Notice that recognizes beneficiary priorities and flaws in MA financing. We strongly urge the Biden administration to build upon these policies to swiftly and more fully improve payment accuracy, insurer accountability, and access to care.