Medicare Advantage Cost Transparency Act
- Sponsor
- Rep. DeGette, Diana [D-CO-1]
- Committees
- Energy and Commerce Committee (primary)
- Last action
- Jun 25, 2026
Bottom line
The bill aims to increase transparency in Medicare Advantage by requiring more granular data on costs and the use of at-home health risk assessments, particularly those conducted by entities affiliated with MA plans.
What it actually does
This bill amends the Social Security Act to mandate that Medicare Advantage (MA) plans include more detailed information in the encounter data they submit to the Secretary of Health and Human Services. Specifically, it requires reporting of the allowed amount for services, the amount of beneficiary cost-sharing, and indicators for whether an individual received an at-home health risk assessment, distinguishing between assessments performed by affiliated and non-affiliated entities.
Proponents argue
Supporters argue that this legislation is crucial for enhancing oversight of Medicare Advantage plans, providing policymakers and researchers with essential data to understand actual costs, identify potential overpayments, and ensure beneficiaries are not subjected to excessive cost-sharing. The specific tracking of affiliated health risk assessment entities is seen as vital for uncovering potential conflicts of interest or practices that may inflate risk scores without improving care.
Opponents contend
Critics of similar transparency mandates often contend that additional reporting requirements impose significant administrative burdens and costs on Medicare Advantage organizations, potentially diverting resources from patient care. They might argue that existing data collection mechanisms are sufficient or that the proposed new data points are overly granular and complex to implement, potentially leading to data inaccuracies or misinterpretations.
The bill is very short and clearly written, allowing for quick comprehension by an informed reader.
Section 2, amending Section 1859 of the Social Security Act (42 U.S.C. 1395w-28)
Enhanced Medicare Advantage Encounter Data Requirements
This provision mandates that, starting January 1, 2027, Medicare Advantage plans must include specific new data elements in the encounter data they submit to the Secretary. These elements include the 'allowed amount' for any item or service, the exact amount of cost-sharing (deductibles, copayments, coinsurance) imposed on the beneficiary, and distinct indicators for whether the beneficiary received an at-home health risk assessment. Crucially, it requires differentiating if such an assessment was performed by an entity that has an ownership or control interest linked to the MA organization (a 'specified assessment entity') versus an independent entity.
Supporters argue
Proponents argue that this provision is essential for shedding light on the opaque financial operations of Medicare Advantage plans. By requiring detailed reporting on allowed amounts and cost-sharing, it will enable a clearer understanding of how federal payments translate into actual healthcare costs for beneficiaries. The specific tracking of affiliated health risk assessment entities is critical for identifying potential incentives for upcoding or other practices that may inflate risk scores and federal payments without necessarily improving care.
Critics contend
Opponents, particularly from the MA industry, might contend that these additional reporting requirements impose an undue administrative and financial burden on plans, requiring costly system overhauls and diverting resources that could otherwise be used for patient care or benefit enhancements. They may also argue that existing data provides sufficient oversight and that overly granular data could lead to misinterpretations or unfair scrutiny of legitimate business practices.
Tradeoffs
This provision navigates the tension between the public's and government's demand for greater transparency and accountability in the Medicare Advantage program, and the administrative burden and compliance costs placed upon private health plans. It also seeks to balance the potential benefits of at-home health risk assessments for care coordination against concerns about their potential misuse for risk score optimization.
The bill requires distinct indicators for at-home health risk assessments based on whether the assessment entity has an 'ownership or control interest' (as defined in Section 1124(a)(3) of the Social Security Act) in the Medicare Advantage organization. This means MA plans must report if the assessment was done by an affiliated company.
Section 2, subsection (j)(1)(C), (j)(1)(D), and (j)(2)(B)
Why it matters:This is standard legislative practice to avoid redundancy and ensure consistency with existing legal definitions. However, it requires a deeper dive into statutory references to understand the full scope of what constitutes an 'affiliated' entity.
Case for: Supporters argue that this specific data point is crucial for identifying potential conflicts of interest where MA plans might be incentivized to conduct health risk assessments through their own or closely related entities. This could reveal patterns of 'upcoding' or inflated risk scores that lead to higher federal payments without necessarily reflecting a true increase in beneficiary health needs.
Case against: Opponents might argue that requiring such a specific distinction adds unnecessary complexity to reporting and that all legitimate health risk assessments, regardless of the entity performing them, contribute to patient care and accurate risk adjustment. They may also contend that existing oversight mechanisms are sufficient to address any concerns about affiliated entities.
Estimated impact: This provision could significantly impact how MA plans structure their relationships with health assessment providers and how CMS analyzes risk adjustment practices. It has the potential to reveal systemic issues related to affiliated entities and influence future policy on MA payments and oversight.