Democrats urge Republicans to target Medicare Advantage ‘upcoding’ instead of cutting Medicaid

STAT News – Thursday, May 8, 2025
By Bob Herman

As Republicans in Congress debate ways to cut Medicaid so they can fund tax breaks, Democrats are pushing them in a different direction: cut excess spending in Medicare Advantage instead.

Five senators, including Bernie Sanders (I-Vt.) and Elizabeth Warren of Massachusetts, and 36 lawmakers in the House, told top Republicans Thursday that Medicare Advantage is rife with “wasteful spending.” They specifically called out upcoding, in which health insurers make their members appear sicker than they actually are so the government gives them more money.

“Your directive to cut federal health care spending should come from reducing waste, fraud, and abuse like upcoding by for-profit insurance companies, not by cutting health care benefits for American families who rely on Medicaid to make ends meet,” the Democrats wrote in separate letters to Republican leaders Sen. John Thune (S.D.) and Rep. Mike Johnson (La.).
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A handful of Democrats have consistently denounced overpayments in Medicare Advantage, the private version of the federal health program for older Americans and people with disabilities. The Medicare Payment Advisory Commission, an independent agency that advises Congress on the program, said this March that Medicare will pay Medicare Advantage insurers $84 billion more this year than it would have spent if people were enrolled in traditional Medicare. The overpayments are tied to insurers’ intensive coding practices and how the program generally attracts healthier people.

Although Democrats have driven most criticism of Medicare Advantage, Republicans increasingly have become receptive to reforming the program. Sen. Bill Cassidy (R-La.) has sponsored a bill that would ban certain forms of upcoding in the program. Rep. Mike Kennedy (R-Utah) told STAT earlier this year that some home visits conducted by Medicare Advantage insurers are “a terrible waste of the taxpayer dollar.”

Even Mehmet Oz, President Trump’s head of the Centers for Medicare and Medicaid Services, told lawmakers during his confirmation hearing that “the upcoding in Medicare Advantage programs has become the best example of [overpayments] out there, and is something that is addressable. And I pledge, if confirmed, I will go after it.”

Republicans have instructed the House Energy and Commerce Committee to reduce federal spending under its purview by $880 billion over the next decade to help fund lower taxes that would primarily benefit wealthy individuals. Medicaid, which covers more than 78 million low-income people, is considered to be the main target for those cuts. The House Ways and Means Committee also has some jurisdiction over Medicare Advantage.

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