AARP Endorses Senate Legislation to Stop Medicare Advantage Plans’ Excess Billing

AARP is backing bipartisan congressional legislation designed to stop Medicare managed-care plans from inflating patient diagnoses to boost their payments from the federal government. 

This practice from privately run Medicare Advantage plans, called “upcoding,” is expected to increase the cost of care for Medicare Advantage plan enrollees by $40 billion this year, compared with the cost to cover similar patients in original Medicare, according to the Medicare Payment Advisory Commission.

With more than half of Medicare’s 68.6 million beneficiaries now enrolled in Medicare Advantage plans, upcoding has drawn the scrutiny of regulators, lawmakers and consumer advocates who fear it will weaken Medicare’s finances and increase beneficiaries’ premiums. The Medicare trust fund that helps pay for hospital stays is already projected to be depleted of its reserves by 2033, three years earlier than a 2024 trustees’ report predicted.

That’s why AARP, which advocates for the more than 100 million Americans age 50 and older, is endorsing S. 1105, the No Unreasonable Payments, Coding, or Diagnoses for the Elderly (No UPCODE) Act of 2025.

Bill would save the government money

Introduced by Sens. Bill Cassidy (R-La.) and Jeff Merkley (D-Ore.), the legislation would “help better align payments” to Medicare Advantage plans “with the actual health needs of enrollees, which will help to protect and strengthen Medicare for current and future beneficiaries,” according to a July 14 letter to the lawmakers from Bill Sweeney, AARP’s senior vice president for government affairs.

“We are ready to work with you both to strengthen the integrity of Medicare and ensure that American tax dollars are efficiently spent to deliver the highest quality care,” Sweeney’s letter said.

He continued: “AARP believes that the No UPCODE Act is a commonsense solution that protects older Americans, strengthens oversight, and helps to ensure the long-term sustainability of Medicare.”

Medicare Advantage plans, offered through commercial insurers, receive monthly payments from Medicare to cover each enrollee’s cost of care. But because sicker patients are a higher risk, treating them results in higher payments based on the way their illnesses are coded. Whistleblowers and the Justice Department have accused some Medicare Advantage insurers of exaggerating the severity of patient ailments to be paid more.

Most of the upcoding stems from health risk assessments — home visits to evaluate a patient’s medical condition, according to studies from the federal Department of Health and Human Services’ Office of Inspector General. A 2024 report found that most of the $7.5 billion in additional payments to Medicare Advantage plans resulted from questionable patient diagnoses based on in-home health risk assessments and medical chart reviews done as part of those assessments.