June 24, 2026
The Honorable David Schweikert
Chairman
Joint Economic Committee
Washington, DC 20510
The Honorable Maggie Hassan
Ranking Member
Joint Economic Committee
Washington, DC 20510
Dear Chairman Schweikert, Ranking Member Hassan, and Members of the Committee,
National Taxpayers Union, the nation’s oldest taxpayer advocacy organization, commends the Committee for examining how fraud and improper payments in federal health care programs burden patients and taxpayers.
Fraud and improper payments are blights on the federal government. Since 2003, federal programs have made approximately $2.8 trillion in improper payments. In Fiscal Year 2023 alone, 14 federal agencies reported a total of $236 billion in improper payments across 71 government programs. Furthermore, the Government Accountability Office (GAO) estimates the federal government loses between $233 billion and $521 billion annually to fraud.
While mitigating these entrenched problems requires a multitude of solutions, we urge the Committee to start by focusing on reforms to the federal bureaucracy that reduce incentives for private insurance companies participating in Medicare Advantage to overcharge the Centers for Medicare and Medicaid Services (CMS). The longstanding problem of “upcoding” in Medicare Advantage has attracted the attention of lawmakers on both sides of the aisle, and bipartisan legislation that could save taxpayers billions annually has already been introduced in the Senate.
More than half of all improper payments by the federal government come from health care programs, and upcoding remains one of the most significant drivers of wasteful spending in Medicare Advantage. This program allows seniors to receive their Medicare benefits through private insurance plans. However, because reimbursements are tied to the reported health risks of enrollees, insurers have a financial incentive to exaggerate patient diagnoses to secure higher payments from CMS. This tactic inflates federal health spending even though no additional care is actually delivered to beneficiaries.
With more than half of Medicare’s 68 million beneficiaries now enrolled in Medicare Advantage plans, even small payment distortions carry profound fiscal consequences. Congress’s independent Medicare advisory commission estimates that, because of upcoding, Medicare Advantage will cost roughly $40 billion more in 2025 than traditional Medicare would for the same population. This extra spending accelerates the depletion of Medicare’s Hospital Insurance Trust Fund, which is currently projected to run out of money by 2033 if no reforms are enacted.
Introduced by Senators Bill Cassidy (R-LA) and Jeff Merkley (D-OR), the No Unreasonable Payments, Coding, or Diagnoses for the Elderly, or “No UPCODE Act” directly addresses these concerns by ensuring that Medicare Advantage payments reflect the actual underlying health status of seniors, not exaggerated claims.
Currently, Medicare Advantage payments are based on just one year of patient diagnoses, which makes it easy for plans to quickly exaggerate medical risks. By mandating the use of two years of diagnostic data instead of one, this reform provides a more accurate way to assess the validity of diagnoses and subsequent treatments. This legislation also excludes diagnoses that come solely from chart reviews or in-home health assessments without supporting doctor visits. Finally, this bill aligns diagnoses with traditional Medicare and applies a coding adjustment to correct any remaining differences, further limiting opportunities to inflate payments.
With interest on the national debt already consuming about 13% of the entire U.S. federal budget, allowing billions in tax dollars to be routinely lost to improper payments is simply unconscionable. We appreciate the Committee’s leadership on this issue and stand ready to assist in developing solutions that prioritize the interests of patients and taxpayers.
Sincerely,
Alexander Ciccone
Policy and Government Affairs Manager
National Taxpayers Union