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Medicare Advantage Under Scrutiny: New CMS Leadership Signals Tougher Enforcement
Dr. Mehmet Oz’s confirmation as the next administrator of the Centers for Medicare & Medicaid Services (CMS) on April 3, 2025, signals potential changes ahead for the Medicare Advantage program. During congressional hearings, Dr. Oz portrayed himself as the “new sheriff in town,” particularly regarding Medicare Part C, commonly known as Medicare Advantage (MA).
As the Trump administration renews its commitment to combating fraud, waste, and abuse in federal programs, health plans and providers participating in Medicare Advantage should prepare for heightened scrutiny and enforcement actions under the False Claims Act (FCA).
Medicare Advantage has become the largest component of Medicare both in spending and enrollment. The program allows Medicare beneficiaries to enroll in private insurance plans offering Medicare benefits. CMS pays these plans a per-person amount, adjusted based on beneficiaries’ demographic information and health conditions through “risk scores” – higher scores for more expensive-to-treat conditions result in larger payments.
The program’s growth has been remarkable. According to the Medicare Payment Advisory Commission’s March 2025 report, Medicare Advantage enrollment more than doubled since 2010, now covering approximately 33.6 million beneficiaries – over half of eligible Medicare recipients. In 2024, 175 Medicare Advantage Organizations offered 5,678 plan options, with CMS payments reaching an estimated $494 billion.
This rapid expansion has attracted increased regulatory attention, particularly around chart review practices. On January 15, 2025, the Department of Justice (DOJ) released its annual report on FCA settlements for fiscal year 2024, highlighting enforcement activities involving Medicare Advantage.
A significant case highlighting these concerns is United States ex rel. Benjamin Poehling v. UnitedHealth Group, Inc. Initially filed in 2011 by UnitedHealth Group’s former finance director, the case alleged that UHG, the nation’s largest Medicare Advantage Organization, knowingly submitted false risk scores to increase payments and retained resulting overpayments.
During President Trump’s first term, DOJ intervened in the case, alleging UHG fraudulently retained $2.1 billion through “one-way” chart reviews designed to identify diagnoses that would increase risk adjustment payments while ignoring those that would decrease payments – potentially violating the “reverse false claims” provision of the FCA.
On March 3, 2025, after eight years of litigation, the special master assigned to the case recommended summary judgment in favor of UHG, finding the government failed to provide evidence that UHG submitted unsupported diagnosis codes or acted with improper intent. The special master noted that UHG had disclosed its chart review practices to CMS as early as 2014.
The government challenged this recommendation on April 2, 2025, arguing the special master improperly interpreted the FCA’s “reverse false claims” provision. A hearing is scheduled for June 5, 2025.
Despite this development, industry participants should not view the recommendation as an endorsement of chart review programs. In December 2019, HHS-OIG expressed concerns about billions in MA payments stemming from chart reviews, and in October 2024, identified them as vulnerable to misuse, estimating they caused $7.5 billion annually in potentially improper risk-adjusted payments.
Beyond chart reviews, marketing arrangements are also facing increased scrutiny, particularly those involving Special Needs Plans (SNPs), which serve specific populations like dual-eligible beneficiaries or those with chronic conditions. Between 2023 and 2024, SNP enrollment grew by 13%, accounting for nearly 40% of all MA enrollment growth.
On December 11, 2024, HHS-OIG issued a special fraud alert warning about questionable payments and referrals between MA plans, healthcare professionals, and third-party marketing organizations. Recent FCA settlements highlight these risks, including MCS Advantage’s $4.2 million settlement in 2022 regarding gift cards distributed to provider staff, and Commonwealth Care Alliance’s $520,000 settlement in January 2025 for cash payments to healthcare professionals in exchange for patient contact information.
For plan year 2025, new regulations prohibit contracts that inhibit agents or brokers from objectively recommending the most appropriate MA plan for beneficiaries. Marketing arrangements that steer beneficiaries to plans not aligned with their best interests may expose participants to FCA and Anti-Kickback Statute liability.
As the Trump administration implements its priorities, including a recently announced restructuring and downsizing of 20,000 HHS employees on March 27, 2025, the industry awaits HHS-OIG’s Medicare Advantage Program industry-specific compliance guidance, previously expected in 2025.
Given the program’s continued growth and the administration’s focus on eliminating fraud and waste, Medicare Advantage stakeholders should closely monitor enforcement activities, ensure marketing arrangements comply with regulations, and maintain robust compliance programs to minimize potential FCA exposure.
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12 Comments
The False Claims Act scrutiny of Medicare Advantage is a sign that the new CMS leadership is taking program integrity seriously. Providers and plans will need to ensure strong compliance.
Increased enforcement could have ripple effects throughout the healthcare industry. Careful monitoring of the situation will be important going forward.
The Medicare Advantage program has faced scrutiny for potential fraud and abuse. It will be interesting to see how the new CMS leadership under Dr. Oz approaches enforcement and oversight of this rapidly growing program.
Combating fraud and abuse is important, but the program has also provided valuable coverage options for many Medicare beneficiaries. Striking the right balance will be key.
This is an issue that deserves close attention. The Medicare Advantage program has provided valuable coverage options, but potential fraud and abuse must be addressed.
It will be interesting to see how Dr. Oz and the CMS balance program integrity with preserving patient choice and access. Striking the right balance will be crucial.
Heightened False Claims Act scrutiny could have significant implications for Medicare Advantage plans and providers. Careful compliance will be crucial to avoid potential enforcement actions.
It’s concerning to see the program facing these allegations. Transparency and accountability should be the priority to ensure Medicare Advantage benefits are delivered properly.
The rapid growth of Medicare Advantage has raised some red flags. Increased oversight is likely warranted, but the program’s value for many beneficiaries shouldn’t be overlooked.
Ensuring proper risk adjustment and preventing upcoding will be a key focus. It’s a delicate balance between program integrity and preserving patient choice.
Dr. Oz’s commitment to combating fraud and abuse in Medicare Advantage is encouraging, but the program’s complexity means enforcement will require a nuanced approach.
Rooting out bad actors is important, but CMS should also consider ways to streamline and improve the program for the benefit of legitimate providers and enrollees.