Medicare Watch

Your Weekly Medicare Consumer Advocacy Update

Overpayments to Medicare Advantage Plans Highlighted in New Series

June 12, 2014

Center for Public Integrity Highlights Overpayments to Medicare Advantage Plans

A series from The Center for Public Integrity highlights issues involving overpayments to Medicare Advantage (MA) plans. Private MA plans contract with the federal government to provide insurance to older adults and people with disabilities, and Medicare typically pays higher rates for those who are sicker and require more expensive care. Health plans use the medical data they collect on their enrollees to calculate a “risk score,” which is the government formula used to determine payments to MA plans.

According to recent audits by Medicare, billing errors among MA plans, based partly on inflated assessments of how sick patients are, accounted for a large amount of overpayments by the Medicare program. The Center for Public Integrity details key findings based on a review of the results of audits released by the federal government. These findings conclude that:

  • According to recent Medicare audits, in 2007, six MA plans were unable to justify about $650 million in Medicare payments.
  • In 2012, the federal government halted efforts to recoup an estimated $32 billion worth of overcharges from 2008 through 2010.
  • Medicare audits occur so infrequently that it will most likely take federal officials more than 15 years to review hundreds of MA contracts currently in place. 

Click here to read the series.

Medicare Now Required to Cover Medically Necessary Care for Those with Gender Dysphoria

According to the American Psychiatric Association, gender dysphoria occurs when a person’s gender at birth is contrary to the one they identify with. The Department of Health and Human Services (HSS) Department Appeal Board (DAB), an independent federal appeals board, recently issued a decision that Medicare must cover medically necessary care for individuals with gender dysphoria—including gender transition surgery.

This Medicare coverage decision helps to ensure that all Medicare beneficiaries are able to get the medically necessary care they need. Professional organizations, including the American Medical Association and the American Psychological Association, agree that the standards for medical treatment of gender dysphoria include hormone therapy, mental health care, and in severe cases, gender transition surgery.

The HSS DAB decision allows gender dysphoria to be covered by Medicare in the same way Medicare covers other medical conditions. While gender transition surgery is not a necessary treatment for everyone with gender dysphoria, it is medically necessary for those with certain cases. Going forward, Medicare will make a case-by-case determination depending on the person’s medical needs and the opinion of their medical providers.

Click here for a factsheet about Medicare gender transition coverage from the National Center for Transgender Equality.

Click here for more info from SAGE.

Volume 5, Issue 23

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Medicare Reminder

Retiree insurance is secondary to Medicare, which means that it pays after Medicare pays. If you have retiree insurance from your or your spouse’s former employer, you should usually enroll in both Medicare Parts A and B as soon as you are eligible. This applies if you are eligible for Medicare because you are 65 or older or due to a disability.

If you do not take Medicare when you are eligible and later decide to enroll, you may have to pay a Part B penalty for late enrollment in addition to the monthly premium. Additionally, you may also have gaps in your coverage because you will have to wait until the General Enrollment Period to enroll in Part B. The General Enrollment Period is January 1 through March 31 each year, with coverage beginning July 1.

If you have prescription drug coverage through your retiree plan, you may not have to take a Part D prescription drug plan. Call your plan to check if its coverage is creditable, meaning it is as good as or better than Medicare’s coverage. Before making any decisions that involve your retiree coverage, you should talk to your benefits administrator.

Click here to learn more about retiree coverage and Medicare on Medicare Interactive.



Last week, the U.S. Senate confirmed the nomination of Sylvia Mathews Burwell to be the next Secretary of Health and Human Services (HHS). Ms. Burwell recently served as the White House’s budget director. As Secretary of HSS she will be in charge of the largest domestic government department and will be responsible for delivering health insurance to more than 100 million Americans.

Click here to read press coverage of Ms. Burwell’s confirmation.


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