During a House Ways and Means Committee hearing prior to the congressional recess, Rep. Judy Chu (D-CA) asked Brookings Institution Fellow, Matthew Fielder, about Medicare work requirements in the Republican budget.
00:03It was just less than three weeks ago that President Trump and Republicans passed the single largest rollback of health care in our country's history in the big, ugly bill.
00:15$500 billion in Medicare cuts, $1.5 trillion in total health care cuts, the largest cut to Medicaid ever, and a $5 trillion deficit increase.
00:26All disguised as an effort to root out waste, fraud, and abuse.
00:32The result? More than 15 million Americans will lose their health coverage.
00:38And some of those people won't lose coverage because they made too much money or no longer qualify.
00:45They'll lose it because they missed a paperwork deadline.
00:48That's the truth behind Medicaid paperwork requirements.
00:52Medicaid is not a cash assistance program. It's health insurance.
00:57No one is getting a check in the mail.
00:58They're getting a doctor's visit, a prescription filled, or help paying for a nursing home stay.
01:05So when Republicans claim they're going after fraud, what they're really doing is kicking people off coverage for failing to navigate red tape
01:14and freeing up money to pay for tax cuts for billionaires.
01:18And meanwhile, there is real waste, fraud, and abuse happening in Medicare Advantage.
01:27We've seen rampant up coding that is submitting higher reimbursements for codes than the services actually received.
01:35We see inflated risk scores of enrollees.
01:39We see opaque AI systems denying medically necessary care and a complete lack of transparency.
01:46GAO, HHS, OIG, and MedPAC have all raised the alarm bells.
01:52So, Dr. Fiedler, I'd like to ask you, can you explain why Medicaid work requirements don't actually detect fraud
02:00and how, by contrast, Medicare Advantage is raking in billions in improper payments with virtually no accountability.
02:10Why should Congress let multibillion-dollar insurers gain the Medicare system while punishing low-income families who are just trying to stay healthy?
02:20So, thank you for the question.
02:22So, no, as you said, Medicaid work requirements are not a policy targeted at fraud.
02:26They remove eligibility from some low-income adults, for example, someone who's recently lost their job and is looking for work.
02:32And then, as you alluded to, they cause many people who are in compliance with the policy.
02:36They're working.
02:37They're in school.
02:38They have a health condition that would exempt them from the policy to lose coverage because they can't document that they fall into one of those categories.
02:44And so, you know, we know that that does save the government money because now fewer people are insured, but that's at the cost of worsening access to care, financial security, and health outcomes for the people who are now uninsured.
02:57On the Medicare Advantage side, you know, we have clear evidence that we're paying Medicare Advantage plans tens of billions of dollars a year that we're not supposed to be paying them under the law.
03:05And we also have evidence that those additional payments aren't generating commensurate value for beneficiaries.
03:11So, I think the trade-offs involved in these two policies are quite different.
03:16Now, when Medicare Advantage was first created, Dr. Fiedler, it was sold as a way to give seniors more choices, better coordinated care, and lower costs.
03:25But after two decades, that promise hasn't held up.
03:28Instead of saving money, the federal government is now paying 20% more per beneficiary in MA than in traditional Medicare to the tune of $84 billion in overpayments this year.
03:41So, we know that 50% of every additional dollar paid to MA plans actually benefits patients, and that's just 50%.
03:50The rest goes towards profit, marketing, and prior authorization systems that increasingly rely on artificial intelligence.
03:59We've seen AI tools deny chemotherapy, rehab, and post-acute care, not because the care wasn't medically necessary, but because the algorithm said no.
04:09That's why I'm preparing to introduce legislation that would require transparency in how MA plans use AI,
04:17ensure that any AI system complies with traditional Medicare coverage standards,
04:22and mandate physician review before any adverse determination is issued.
04:27It would also direct CMS to audit AI algorithms and evaluate their impact on patient access.
04:34Dr. Fiedler, can you talk about the necessity for federal guardrails on these AI technologies?
04:42Dr. So, I think, just as there's been a lot of discussion about the need for appropriate oversight of prior authorization generally,
04:49I think there's an important need to make sure that that framework extends to AI and the other new technologies that we have coming down the pipeline.
04:58In some cases, that'll hop in automatically, but in some cases, that's going to require policy action to make sure that happens.
05:03Obviously, to the extent that doesn't happen, this sort of, you know, talking about, we had some discussion about striking the balance of good prior auth,
05:12but excessive, and avoiding excessive prior auth, and I think we need to strike the same balance with respect to the use of AI.
