Skilled nursing operators frequently decry Medicare Advantage plans’ focus on lower reimbursements and shorter lengths of stay, but a group of lawmakers claims that insurers in the space are spending far too much money — and potentially putting their beneficiaries at risk.
A group of six U.S. senators, all Democrats, wrote a forceful letter to Centers for Medicare & Medicaid Services (CMS) administrator Seema Verma earlier this month, calling on her and the agency to crack down on plans that they claim waste government money.
“We urge you to take prompt action to ensure MA plan sponsors are held accountable for overcharging the federal government, meeting their contractual obligations, and appropriately managing the needs of older adults and people with disabilities,” the group wrote.
The signatories consisted of Sens. Sherrod Brown of Ohio, Chris Murphy and Richard Blumenthal of Connecticut, Bernie Sanders of Vermont, Amy Klobuchar of Minnesota, and Debbie Stabenow of Michigan; Sanders and Klobuchar are also currently pursuing the Democratic Party nomination for president.
The senators specifically cited a Department of Health and Human Services (HHS) report issued earlier this year, which found that MA plans had received $30 billion in excess payments between fiscal years 2016 and 2018. Looking back a decade, that figure balloons to $100 billion, the senators noted, blaming Medicare Advantage plans for “exaggerating how sick their patients are.”

In response, the lawmakers requested a detailed plan describing how CMS plans to crack down on overbilling and claw back some or all of the excess payments to Medicare Advantage insurers.
“If CMS cannot hold Medicare Advantage plans accountable and recoup these tens of billions of dollars, how can Congress ensure the financial integrity of the Medicare Advantage program?” they asked.
The letter also includes requests for CMS to present more public data to consumers considering enrollment in Medicare Advantage plans, including complete lists of participating providers for each insurer and clearer information about beneficiaries’ potential out-of-pocket costs.
“By law, people with Medicare are entitled to an informed health plan choice, and it is critical that CMS take necessary actions to ensure that individuals can make one,” the senators wrote.
Medicare Advantage plans straddle the line between public and private health insurance, with for-profit insurers receiving Medicare funding from the government, then managing payments to providers within their networks. The plans, also known as managed Medicare, have steadily grown in popularity among an aging U.S. population, as they often provide supplemental coverage and other benefits beyond traditional fee-for-service Medicare.
Medicare Advantage plan penetration has hovered steady around 34% of all Medicare beneficiaries over the last several years, according to a report from the Kaiser Family Foundation released earlier this year, and the Congressional Budget Office predicts that number will reach 47% by the end of this decade.
Despite the federal lawmakers’ focus on overspending, post-acute providers generally face the opposite problem from their Medicare Advantage partners: With a private insurer’s eye on profit margins, these plans often pay less for skilled nursing services than traditional fee-for-service Medicare, and frequently apply pressure to reduce length of stay for their MA enrollees.
For instance, MA plans paid an average of $432 per patient day in the second quarter of this year, the National Investment Center for Seniors Housing & Care (NIC) reported last week — well below the $525 daily rate for traditional Medicare.
Though the lawmakers’ focus was primarily on stewardship of federal dollars, the senators called for overall structural changes and tighter government oversight of the rapidly growing MA marketplace.
“It is past time for CMS to engage in regular oversight and enforcement of MA plans to ensure overpaid taxpayer dollars are recouped in a timely manner and MA plans are held accountable for their deficiencies,” the senators concluded. “If there are ways Congress can better support CMS as it works to address these challenges, we stand ready to help.”