Medicare Advantage funding could be cut

Supporters of Medicare Advantage program are roundly criticizing President Obama's fiscal 2016 budget plan to slash more than $36 billion in its funding over the coming decade.

In a Feb. 2 statement from the Better Medicare Alliance, interim executive director Krista Drobac said the cuts would only exacerbate the financial burden on enrollees who already are forced to pay higher out-of-pocket costs while earning fewer benefits due to previous cuts in the Affordable Care Act, according to a Bloomberg News Services report.

The Alliance also asserted that the budget cuts fly in the face of evidence that the program helps move away from fee-for-service healthcare toward high-value care.

Part of the justification for the cuts may come from assertions by the Centers for Medicare & Medicaid Services that MA plans tend to “upcode” diagnoses to extract higher reimbursement than other Medicare fee-for-service providers do, according to the Bloomberg report. The president's plan would lower so-called coding intensity adjustments beginning in 2017.

Overall, the budget would extract close to $400 billion over the next 10 years from Medicare, Medicaid and other programs. Of that amount, about $100 billion would come from reduced inflation updates for providers that care for hospital-discharged Medicare beneficiaries.