Will GOP act on $124B in Medicare insurance fraud?

By Chris Dickerson | Legal Newsline
The Center Square

Earlier this year, UnitedHealthcare acknowledged it is under federal investigation over accusations is defrauded Medicare Advantage through multiple billions of dollars in alleged illegal upcoding, which makes their patients look sicker than they are to get higher payments from the Medicare program.

As Congress debates the upcoming federal budget, healthcare costs are at the center of the debate, with some experts saying one proposed bill could save $124 billion in Medicare waste. That’s enough to both extend coverage and balance the budget.

But with the Republican Party’s close relationship with the insurance industry, some wonder if the bill has any chance of being enacted.

The No UPCODE Act (No Unreasonable Payments, Coding or Diagnoses for the Elderly Act) was introduced in March by Sen. Bill Cassidy, R-Louisiana, and Jeff Merkley, D-Oregon. The bill would improve how Medicare Advantage plans evaluate patients’ health risks, reduce overpayments for care and save taxpayers money by removing incentives to overcharge Medicare.

If passed, this bill would have a significant impact on plans, vendors and risk-bearing provider groups relative to Medicare Advantage. There was an effort to have the bill included in President Donald Trump’s One Big Beautiful Bill, but that didn’t happen.

“The Medicare Trust Fund is going bust in eight years,” Cassidy, who also is a physician, told Legal Newsline. “When companies upcode, they move up that timeline, taxpayers foot the bill, and patients get nothing.

“My bill fixes that — protecting Medicare, saving taxpayers money, and keeping care affordable. With broad support in Congress, I am pursuing every venue possible to move this bill forward.

“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. This is the direction we need to go.”

Merkley agreed.

“Fraud, waste, and abuse by bad actors are destroying the stability of both Medicare Advantage and traditional Medicare — this must end,” he said. “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.

Just this week, President Donald Trump asked Republican leaders to support a short-term spending bill to avert a partial government shutdown at the end of the month.

GOP officials have been working on a plan to keep the government open through Nov. 21, but no details of that plan have been made public. Democratic Congressional leaders have said healthcare will be a key issue in the talks.

“Partisan legislation that continues the unprecedented Republican assault on healthcare is not a clean spending bill,” House Minority Leader Hakeem Jeffries, D-NY, said on X. “It’s a dirty one.”

Insurance companies say Trump and other Republicans are breaking a promise about not cutting Medicare benefits to seniors with the One Big Beautiful Bill. Physicians already have launched an ad campaign targeting senators to stop the legislation, which would reduce federal Medicaid spending by nearly $800 billion and increase the number of uninsured Americans by nearly 8 million.

Insurance companies also are spending big bucks to influence Republicans. UnitedHealthcare, for example, spent $7.7 million in the first half of this year on lobbying efforts, which is about double of what it spent in the first half of 2024. Other insurers have spent more on lobbying as well.

Still, many GOP leaders want to see the No UPCODE Act passed. That includes Senate Finance Committee Chairman Mike Crapo, R-Idaho. Even Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz wants to reduce Medicare Advantage fraud.

In May, CMS announced an expansion of its auditing efforts for Medicare Advantage plans by auditing all eligible MA contracts for each payment year in all newly initiated audits and invest additional resources to expedite the completion of audits for payment years 2018 through 2024.

“We are committed to crushing fraud, waste and abuse across all federal healthcare programs,” Oz said. “While the Administration values the work that Medicare Advantage plans do, it is time CMS faithfully executes its duty to audit these plans and ensure they are billing the government accurately for the coverage they provide to Medicare patients.”

And Democrats have made extending the Affordable Care Act, commonly known as Obamacare.

“House Democrats will not support a partisan Republican spending bill that continues to gut the healthcare of the American people,” Jeffries said.