WASHINGTON, D.C. – U.S. Senator Bill Cassidy, M.D. (R-LA) has joined forces with Senator Jeff Merkley (D-OR) to introduce the No Unreasonable Payments, Coding, or Diagnoses for the Elderly (No UPCODE) Act, aimed at curbing overpayments in the Medicare Advantage program and saving taxpayers billions of dollars.
The bipartisan legislation targets billing practices that inflate the cost of care by eliminating financial incentives for Medicare Advantage plans to exaggerate patient health conditions.
“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.
“Fraud, waste, and abuse by bad actors are destroying the stability of both Medicare Advantage and traditional Medicare—this must end,” added Sen. 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.”
A Costly Incentive
Unlike traditional Medicare, which reimburses providers for the actual cost of treatments, Medicare Advantage pays a flat rate based on the patient’s health status. This payment structure can encourage insurers to make patients appear sicker than they are in order to secure higher reimbursements.
According to the Congressional Budget Office, addressing this issue—referred to as “overcoding”—could save an estimated $124 billion over 10 years.
What the No UPCODE Act Does
The legislation proposes several key reforms to the risk adjustment system used by Medicare Advantage:
- Utilizes two years of diagnostic data rather than just one, creating a more accurate picture of patient health.
- Limits the use of outdated or unrelated medical conditions in calculating reimbursement rates.
- Ensures Medicare is only charged for treatment related to relevant and current diagnoses.
- Closes the disparity between traditional Medicare and Medicare Advantage assessments, promoting consistency and transparency.
Legislative Momentum
Sen. Cassidy discussed the No UPCODE Act earlier this month during the Senate Finance Committee’s confirmation hearing for Dr. Mehmet Oz, the nominee to lead the Centers for Medicare and Medicaid Services (CMS).