Activist groups say Medicare Advantage defrauds taxpayers, call for overhaul

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Doctor with stethoscope isolated on white Zoonar/N.Okhitin


Staff Writer

Published: 01-07-2024 6:00 PM

Modified: 01-07-2024 8:34 PM

AMHERST — Contending that tens of billions of dollars are going to for-profit insurance companies instead of paying for necessary medical needs of senior citizens, Valley Action in Amherst and other regional activist groups are calling for stronger rules to guide and reform the Medicare Advantage program.

Valley Action is among a coalition of Massachusetts- and New York-based Indivisible chapters, a progressive movement that began in 2016 that has submitted a slew of comments to the Centers for Medicare and Medicaid Services, which regulates Medicare Advantage. The groups are asking that the insurance companies stop delaying and denying care when enrollees become very sick, that rules be put in place to ensure quality and timely care and that people have more control over their Medicare funds.

A series of existing problems with Medicare Advantage won’t be addressed by the revisions the agency is considering, nor are they sufficient enough to stop defrauding taxpayers, the activist groups contend. Those problems consist of making access to care more difficult, limiting the number of providers they can use and possibly requiring referrals.

“We want people to tell the CMS that the proposed rules are completely inadequate and do not address the problem,” said Elaine Fronhofer, an Amherst attorney who co-founded Valley Action.

Instead, Fronhofer said, there is a need to completely revamp what they see as theft by the private insurance companies, dubbed by critics as “Big Health,” that offer Medicare Advantage plans.

While traditional Medicare is administered by the government, the government only regulates Medicare Advantage. The private insurance company plans cover all services in Medicare Part A (hospital costs) and Part B (practitioner services), while also offering additional benefits such as dental, vision and hearing coverage, as well as prescription drugs. Customers generally pay premiums that are less than what they would pay for traditional Medicare and receive this added coverage.

In publicity on its website, Valley Action writes that “for-profit insurance companies have been defrauding taxpayers by abusing a program (Medicare ‘Advantage’) that permits insurance companies to offer Medicare-like insurance to seniors. The government pays these companies from taxpayer money that traditionally went to pay for Medicare.”

Fronhofer said that Valley Action, as an Indivisible group, was asked to help work on this issue by Olive Action in Ulster County, another Indivisible group based in New York state.

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The submission of comments to CMS during its public comment period is a “not-to-be-missed opportunity for the public to act as a counterweight to the well-funded industry lobbyists,” Fronhofer said. Valley Action and other Indivisibles are also planning more actions directed at elected and appointed officials.

Valley Action also signed onto a letter, along with Indivisible Northampton-Swing Left Western Mass. and Franklin County Continuing the Political Revolution, both in U.S. Rep. Jim McGovern’s district, and others in U.S. Rep. Richard Neal’s district.

That letter reads, “We send you this letter today to call on the Center for Medicare & Medicaid Services (CMS) to do everything in its power to help traditional Medicare’s solvency and protect Americans from being harmed by the for-profit insurance companies that offer Medicare Advantage plans to seniors and people with disabilities.”

The letter cites Physicians for a National Health Policy’s recent estimates that Medicare Advantage insurers are overcharging taxpayers by up to $140 billion per year and are denying 18% of what would be covered by traditional Medicare, most often for cases requesting skilled nursing colonoscopies, and specialized care for various cancers.

Meanwhile, a bipartisan letter from four U.S. senators was sent in December to CMS Administrator Chiquita Brooks-LaSure.

Massachusetts Democratic Sen. Elizabeth Warren, joined by Sen. Catherine Cortez Masto, D-Nev., Sen. Bill Cassidy, R-La., and Sen. Marsha Blackburn, R-Tenn., write that “researchers have reported billions in overpayments to Medicare Advantage plans, largely driven by favorable selection and shortcomings in the current risk adjustment model” and that “between 2010 and 2019, CMS paid Medicare Advantage plans at least $106 billion in excess payments.”

Those four senators have also introduced legislation to improve transparency of Medicare Advantage plans and ensure these plans best serve the health care needs of America’s seniors. The Encounter Data Enhancement Act would require Medicare Advantage plans to report important information about how much they are actually paying for patient services and how much patients are responsible for paying out of pocket.

“For years, Medicare Advantage plans have been using a long list of tricks to overcharge the government for coverage, while delaying and denying care for seniors,” Warren said in a statement. “By strengthening data transparency, this bipartisan bill will empower lawmakers and regulators to rein in this fraud and abuse, and ensure taxpayer dollars are being used to deliver high-quality coverage for Medicare beneficiaries.”

While the deadline for comments to CMS was last Friday, Valley Action Group is holding an in-person meeting Jan. 18 from 6:30 to 8:30 p.m. at the Bangs Community Center, Room 101, where additional steps will be discussed.

Scott Merzbach can be reached at