Dr. Mehmet Oz has vowed to reduce the bureaucratic footprint of the Centers for Medicare and Medicaid Services (CMS) if he confirms he will lead a federal agency. He also acknowledged the issues with the Medicare Advantage Plan and criticised the pre-approval process and overbuilding by insurance companies.
During his appearance before Friday's Senate Committee, Oz appeared to retreat from his previous, more enthusiastic support for the MA plan.
In addition to agreeing to the Senator, he also proposed to respond to upcode deadlines (practics related to the submission of codes for more acute and costly diagnoses) and the issues with the pre-approval process for the service, he also proposed to respond to a more streamlined and efficient pre-approval system. Oz also submitted questions from lawmakers about the proposed Medicaid reduction.
“We've taken about 12% of our CMS budget by intermediaries in ways that we don't think we need to be true in the long run,” he said. “We believe that there are technologies that have not existed for three or four years now and have the power to automate many of these processes.
He also said Medicaid must ensure proper medical payments and access to patients, and the solution to streamline balloon Medicaid budgets is to reduce the costs of care through operational efficiency.
In exchange for Sen. Ron Wyden (D-ore.), Oz said he “cared for Medicaid” and when the scenario was later presented by a Democrat at the hearing, he appeared sympathetic to Medicaid patients being denied care.
As CMS Chief, OZ oversees health insurance programs covering more than 150 million Americans, including Medicare, Medicaid and Affordable Care Acts. In 2024, CMS spent around $1.516 trillion. This is 22% of the total federal government costs.
The tone of the hearing appeared to be quite different from the hearing against Robert F. Kennedy's appointment, which will lead the Department of Health and Human Services (HHS). Oz met with lawmakers last month and is widely expected to be confirmed.
Oz also discusses abuse in the Medicare Advantage sector, highlighting issues surrounding the sales of these plans, and focusing on brokers who “rest policy” to win commissions. He suggested that seniors consider a multi-year plan to reduce broker costs. Oz also shared the need to investigate whether some of the funds used in plans to attract MA enrollees should be refunded to ensure that Medicare's advantages do not cost more than traditional Medicare.
Medicare benefits
Today, over 66 million Americans use Medicare, with nearly half of them having traditional Medicare. Meanwhile, the other half is in the benefits of Medicare. There, the federal government will instead pay private, commercial insurance companies to manage health benefits.
“And surprise, surprised, privatised Medicare costs even more, Sen. Elizabeth Warren said when he began asking Oz questions.
When criticising Medicare's advantage, she said the issues arise from higher payments due to Medicare Advantage insurance companies that receive the set amount per patient, and the increased diagnosis and codes they list. Although this is intended to cover patients with illness, the reimbursement is based on existing diagnosis, so by adding a diagnosis without providing actual care, the insurance company can benefit.
Warren cited an example of this abuse, as reported by the Wall Street Journal. There, 66,000 Medicare Advantage patients were mistakenly diagnosed as diabetic cataracts, but they were only performed once despite having already undergone cataract surgery, making it an “anatomically impossible” operation. Anyway, this fraudulent diagnosis has forced the insurance company to pocket a $178 million taxpayer fund.
This has totaled $83 billion overpayments for Medicare advantage, Warren said. In contrast, she noted that House Republicans have passed a budget framework that proposes annual cuts in healthcare, Medicaid and services for seniors and people with disabilities.
“I have a simple question: if you need to reduce waste, fraud, and abuse from Fortune 50 health insurance companies with Medicare advantage, or if you need to cut Medicaid funds.
“My goal is to improve health care for Americans, and when you create an argument, the former (the benefits of Medicare scrutinized) is listening to a reasonable method,” replied Oz.
Telehealth as a response to staffing
Sen. Ron Wyden (D-RORE.) asked Dr. Mehmet Oz whether nurses should always be made available 24/7, 24/7, in accordance with the requirements for the federal staffing mandate for nurses finalized last year.
Oz replied that it was a complicated problem, but the shortage of nursing home nurses was the problem, suggesting that the solution lies in technology. He did not give his views on federal staffing mandate.
“In fact, I think we need nurses who work in nursing homes. In many nursing homes, that's the problem,” Oz said. “So we believe we can provide the quality of care that is equivalent to placing nurses in nursing homes using tools and technologies, including telehealth.”
“I hope that we don't bring nurses with us because we have an effort to do that in the Senate. I'm against it,” Wyden said in response.
