Save MEDICARE Act of 2026
- Sponsor
- Rep. Doggett, Lloyd [D-TX-37]
- Committees
- Energy and Commerce Committee (primary)
- Last action
- Jul 17, 2026
Bottom line
The 'Save MEDICARE Act of 2026' seeks to curb alleged overpayments to Medicare Advantage plans and bolster the VA's financial position by improving cost recovery from private insurers, potentially redirecting substantial funds to traditional Medicare and VA healthcare services.
What it actually does
This bill introduces significant reforms to Medicare Advantage (MA) payment mechanisms, including changes to risk adjustment, benchmark payments, and the Quality Bonus Program, aiming to reduce overpayments to MA plans. It also substantially enhances the Department of Veterans Affairs' (VA) ability to recover costs for healthcare services provided to veterans who are also enrolled in MA or Medicare Prescription Drug Plans (PDPs), and strengthens VA's general third-party cost recovery authority. Additionally, it allows states to enforce MA plan requirements and prohibits certain provider financial incentives related to coding.
Proponents argue
Proponents argue that the bill is essential to protect the solvency of Medicare by ensuring that private Medicare Advantage plans are paid appropriately and do not receive excessive payments due to favorable selection or aggressive coding practices. They contend that these reforms will reduce waste, fraud, and abuse, ensuring that taxpayer dollars are used efficiently to benefit all Medicare beneficiaries and veterans. Supporters also highlight the importance of empowering states to oversee MA plans and strengthening the VA's ability to recover costs, thereby supporting veterans' access to care.
Opponents contend
Opponents would likely argue that these changes could destabilize the Medicare Advantage market, potentially leading to reduced benefits, higher premiums, or fewer plan choices for the millions of seniors who rely on MA. They might contend that the proposed risk adjustment and benchmark changes are overly aggressive and do not accurately reflect the health status of MA enrollees, while the enhanced RADV audits and penalties could impose undue administrative burdens and financial risks on plans, ultimately harming beneficiaries. Critics may also argue that the VA cost recovery provisions could create unnecessary friction between the VA and private insurers, complicating care coordination for veterans.
The bill is moderately complex due to its technical language regarding Medicare and VA statutes, but its length makes it manageable for an informed reader to review within a reasonable timeframe.
Sec. 2(a)
Risk Adjustment Code Analysis and Exclusion
This provision mandates that the Secretary of Health and Human Services (HHS) conduct an annual analysis of diagnosis codes used in Medicare Advantage (MA) that show high rates of differential coding (where MA plans code differently than traditional Medicare for similar patients), discretionary coding, or codes with limited treatment implications. Based on this analysis, the Secretary must exclude or adjust these problematic diagnosis codes from the data used to determine MA plan payments, starting in 2028. This aims to prevent MA plans from inflating risk scores and payments through coding practices that do not reflect actual patient health status.
Supporters argue
Proponents argue this provision is crucial for ensuring fair and accurate payments to Medicare Advantage plans, preventing overpayments that divert funds from the Medicare Trust Fund. They contend it addresses documented issues of 'upcoding' where MA plans may inflate diagnoses to receive higher payments, without necessarily reflecting a sicker patient population.
Critics contend
Opponents might argue that excluding or adjusting diagnosis codes could unfairly penalize MA plans for legitimate coding practices and could lead to underpayment for complex patients. They may claim it could reduce plans' ability to offer robust supplemental benefits or manage care effectively for sicker enrollees, ultimately harming beneficiaries.
Tradeoffs
The provision balances the goal of payment accuracy and Medicare solvency against the potential for increased administrative burden on MA plans and concerns about whether payment reductions might impact beneficiary benefits or plan offerings.
Sec. 2(b)
Exclusion of Diagnoses from Chart Reviews and Health Risk Assessments
This section prohibits the Secretary from considering diagnoses collected solely from chart reviews or health risk assessments when establishing payment adjustment factors for Medicare Advantage (MA) and Prescription Drug Plans (PDPs), starting in 2028. The Secretary is also required to establish procedures to identify and verify such diagnoses. This aims to prevent MA and PDPs from using these methods to generate diagnoses that increase risk scores and payments without corresponding evidence from direct patient care encounters.
Sec. 3
End of Quality Bonus Program
This provision amends the Social Security Act to terminate the Medicare Advantage Quality Bonus Program (QBP) after the year 2028. The QBP currently provides bonus payments to MA plans that achieve high quality ratings (4 or 5 stars). Ending this program would remove these additional payments.
Sec. 4(a)
Elimination of County Quartile System for Benchmark Payments
This provision eliminates the current 'county quartile system' used to determine Medicare Advantage (MA) benchmark payments, starting in 2028. Currently, benchmark payments vary based on a county's quartile ranking relative to traditional Medicare spending. By removing this system, the bill aims to standardize how MA benchmarks are calculated, moving towards a more uniform payment structure across different geographic areas.
Sec. 4(b)
Adjustment for Favorable Selection in Benchmark Payments
This provision mandates an adjustment to Medicare Advantage (MA) base payment amounts starting in 2028 to account for 'favorable selection.' Favorable selection occurs when MA plans enroll healthier beneficiaries than traditional Medicare, leading to lower expected spending for MA enrollees with the same risk scores. The Secretary is required to conduct annual analyses of these selection differences across various subgroups and apply the Medicare Payment Advisory Commission's (MedPAC) methodology for estimating favorable selection to adjust MA benchmark payments. This aims to ensure MA plans are not overpaid due to enrolling healthier populations.
Sec. 5(a)
Improving Timeliness of Risk Adjustment Data Validation (RADV) Audits and Appeals
This provision sets strict deadlines for the completion of Medicare Advantage Risk Adjustment Data Validation (RADV) audits and their associated appeals processes, starting with plan years in 2028. It requires contract-level audits to be completed within one year, medical record reviews within 60 days, and both Stage 1 (reconsideration) and Stage 2 (hearing) appeals to be completed within 90 days each. This aims to expedite the resolution of audit findings and payment adjustments.
Sec. 5(b)
Enhancing RADV Audit Process with Recovery Audit Contractors and Penalties
This provision requires the Secretary to contract with recovery audit contractors (RACs) to identify and recoup Medicare Advantage (MA) overpayments, including penalties. For any identified overpayment, a penalty equal to the total overpayment plus interest (as defined in 42 CFR 405.378(d)) will be imposed. RACs may receive contingency fees of up to 20% of recouped overpayments. This aims to significantly strengthen the enforcement and financial recovery aspects of RADV audits.
Sec. 6(a)
VA Cost-Recovery from Medicare Advantage and Medicare Prescription Drug Plans
This provision amends Title 38 of the U.S. Code to allow the Department of Veterans Affairs (VA) to recover costs from Medicare Advantage (MA) and Medicare Prescription Drug Plans (PDPs) for healthcare items or services provided to veterans who are also enrolled in these plans, starting in 2028. This applies regardless of any additional documentation or utilization management requirements the MA/PDP plan might impose. Amounts recovered will be deposited into the VA Medical Care Collections Fund. This ensures that when the VA provides care to a veteran who has MA/PDP coverage, the private plan must reimburse the VA to the extent the service is covered by that plan.
Sec. 6(b)
Modification of Authority for Recovery by United States of Reasonable Charges for Certain Care or Services Furnished to Veterans for Non-Service-Connected Disabilities
This provision significantly strengthens the VA's authority to recover costs from third parties for healthcare services provided to veterans for non-service-connected disabilities. It clarifies the VA's right to recover from various third parties (e.g., tort liability, health plans), sets a 45-day deadline for third parties to pay or respond to claims (with interest penalties for non-compliance), limits third-party refund requests to 18 months, and imposes civil penalties for non-compliance (up to $50,000 per claim violation for willful failure to pay, or triple the claim amount). It also requires third parties to identify recipients of VA benefits and submit relevant information to the Secretary.
Sec. 7
Allowing States to Enforce Medicare Advantage Plan Requirements
This provision amends the Social Security Act to explicitly allow states to require Medicare Advantage (MA) organizations operating within their borders to meet the requirements of Medicare Part C (which governs MA plans). It also mandates that the Secretary of HHS coordinate enforcement with states and allows for collaborative enforcement agreements. This grants states a more direct role in overseeing MA plans, complementing federal oversight.
Sec. 8
Prohibiting Percentage of Premium Contracts or Other Financial Incentives for Coding
This provision prohibits Medicare Advantage (MA) organizations from using 'percentage of premium contracts' or other financial incentives for providers that are directly related to the coding of items and services furnished to MA enrollees, starting in 2028. This aims to eliminate financial arrangements that could incentivize providers to 'upcode' diagnoses to increase MA plan payments, rather than accurately reflecting patient health conditions.
This provision states that there shall be no judicial review of any determination made by the Administrator of the Centers for Medicare and Medicaid Services (CMS) under the Risk Adjustment Data Validation (RADV) audit program, whether under section 1869, section 1878 of the Social Security Act, or otherwise.
Sec. 5(a)(7)(E)
Why it matters:This could be considered potentially evasive. Limiting judicial review for administrative determinations is a substantial curtailment of due process rights for affected entities and is often a contentious policy choice. Placing it within a technical section on audit timeliness might reduce its visibility.
Case for: Proponents would argue that limiting judicial review is necessary to prevent endless litigation that delays the recoupment of overpayments and ties up administrative resources. They might contend that the administrative appeals process within CMS is sufficient to ensure fairness and that finality is needed for the RADV program to be effective.
Case against: Opponents would argue that eliminating judicial review removes a critical check on administrative power and could lead to arbitrary or erroneous decisions by CMS without adequate recourse for Medicare Advantage organizations. They may contend that it undermines due process and could result in unfair financial penalties.
Estimated impact: This provision significantly alters the legal landscape for Medicare Advantage organizations challenging RADV audit findings, potentially reducing their ability to contest large recoupments and penalties in court.
This provision imposes a user fee of 0.02 percent, reducing payments to Medicare Advantage organizations, for the purpose of carrying out Risk Adjustment Data Validation (RADV) audits.
Sec. 5(a)(7)(D)
Why it matters:This is standard legislative practice for funding specific program activities. While a direct cost, the small percentage might not warrant a standalone section, and placing it within the RADV section is functionally appropriate.
Case for: Proponents argue that MA organizations, as the entities subject to RADV audits, should contribute to the costs of ensuring payment accuracy. They contend that this user fee helps fund necessary oversight activities that ultimately benefit the integrity of the Medicare program.
Case against: Opponents would argue that this user fee adds another layer of financial burden on MA organizations, which could ultimately be passed on to beneficiaries through reduced benefits or higher premiums. They may contend that audit costs should be covered by general appropriations.
Estimated impact: A direct financial cost to Medicare Advantage organizations, the total impact of which would depend on the overall MA payment amounts, but intended to fund RADV audit operations.
This provision establishes that if any third party fails to comply with the 45-day payment/response deadline for VA cost recovery claims, they shall be required to pay interest to the United States at the rate established by the Secretary of the Treasury under section 3717 of title 31 per month on the unpaid amount.
Sec. 6(b)(3)(A)
Why it matters:This is standard legislative practice for detailing enforcement mechanisms within a broader statutory amendment. While consequential, it's a technical detail of the enforcement process.
Case for: Proponents argue that interest penalties are a necessary deterrent against delayed payments and ensure that the VA is compensated for the time value of money when third parties fail to pay promptly. This encourages timely reimbursement and protects VA resources.
Case against: Opponents (third-party payers) would argue that such interest penalties can be excessive, especially if there are legitimate disputes or administrative delays beyond their control. They may contend it adds to the punitive nature of the recovery process.
Estimated impact: Increases the financial liability for third parties who delay or fail to pay VA cost recovery claims, potentially generating additional revenue for the VA.
This provision clarifies that the United States may take any action necessary to enforce its subrogation interests under 38 U.S.C. 1729, including by intervening or joining in an action or proceeding.
Sec. 6(b)(2)(A)
Why it matters:This is standard legislative practice for clarifying legal rights and enforcement mechanisms. It's a technical detail of the VA's legal standing.
Case for: Proponents argue that this clarification is essential to ensure the VA has full legal standing to pursue cost recovery from third parties, preventing legal challenges based on procedural grounds. It strengthens the VA's ability to act as a subrogee.
Case against: No specific opposition is typically raised against this provision, as it clarifies existing legal principles rather than introducing new substantive policy, though third parties may generally oppose strengthened VA recovery powers.
Estimated impact: Strengthens the VA's legal position in pursuing cost recovery claims, potentially leading to more successful recoveries.