CMS Administrator Dr. Mehmet Oz said the administration plans to extend Medicare’s solvency through drug-price reforms, fraud reduction and greater use of technology, including artificial intelligence.
Oz laid out the plan after CBS News moderator and senior foreign affairs correspondent Margaret Brennan asked about Medicare’s projected trust-fund insolvency and pressed him on what the administration would do beyond efforts to curb fraud, waste and abuse during an interview on “Face the Nation” on Sunday.
“The plan is the Great American Health Act, and that is going to include codifying the most favored nation drug pricing,” Oz said.
Brennan cited a projection that the Medicare trust fund could become insolvent in seven years, with payments potentially cut by 11%, and asked Oz what the administration’s plan was. Oz said the trust fund “will last twice as long” if Medicare fraud is eliminated and claimed CMS cut $42 billion in Medicare fraud during the previous year.
Oz Points to Fraud Savings
Oz said the administration’s plan includes the Great American Health Act, which would codify most-favored-nation drug pricing and address fraud, waste and abuse.
“It’ll last twice as long. Think about that. Twice as many years of benefits if we just take the fraud out of Medicare,” Oz said.
“Just this past year, we cut 42 billion dollars of fraud for Medicare by never leaving the money out of the door,” he said. Oz added that the administration had not yet reached “full speed” on its fraud efforts.
“The fraud doesn’t just steal money. It steals our trust,” Oz said, adding that some states are not working closely with the administration on the issue.
CMS, led by Oz, has also pursued broader efforts against potentially improper health-care enrollments. The agency has estimated that roughly 35% of Marketplace enrollments may be illegitimate and cited a federal report identifying 2.6 million improper or phantom enrollments.
The HHS Office of Inspector General projected $5.56 billion in recoveries and savings over six months. The report also cited $674 million in settlements involving affiliates of Kaiser Permanente and CVS Health’s Aetna over allegations of inflated Medicare Advantage billing.
Drug Prices Take Center Stage
Oz also pointed to most-favored-nation drug pricing as a major source of savings. He said 17 pharmaceutical companies representing 85% of the drug sector had agreed to the pricing approach.
“What we want is better prices for the American people. And we got it,” Oz said.
He said eligible Medicare beneficiaries can access some GLP-1 medications for $50 a month, compared with more than $1,000 a month previously.
“$50 a month means you can do something to help yourself lose weight, reduce blood pressure, reduce diabetes, and all the downstream costs that would have been incurred no longer happen,” Oz said.
Oz also said all new drugs released in the U.S. by large pharmaceutical companies will be subject to most-favored-nation pricing.
The administration has separately moved to end the Medicare Part D Premium Stabilization Demonstration after the 2026 plan year. CMS said the program was no longer needed, while administration officials projected that many beneficiaries would see either flat premiums or increases of less than $10 in 2027.
AI Could Drive Bigger Savings
Brennan then pressed Oz on whether fraud reduction would be enough to address the broader financing problem and asked about additional plans.
Oz pointed to technology as a potentially larger source of savings.
“Without question, what’s even bigger is an opportunity to save us money is the use of technology including artificial intelligence,” Oz said.
He said 50% of doctors now use AI to reduce administrative work and paperwork and to help provide advice to patients.
“We have a health tech ecosystem run by Amy Gleason at within our agency that has been massively effective in recruiting,” Oz said, adding that 800 companies had joined a pledge to participate.
Oz also said access to medical records had expanded significantly.
“Last year when I would sit here with you, 5% of Americans had access to their medical records so they could use them wherever they wanted,” he said. “Today, it’s over 50%.”
“We’re dramatically changing how information flows to the system,” Oz said, adding that health-care providers are being required to provide patients with access to their medical records.
The Medicare Part A Hospital Insurance trust fund is projected to be depleted in 2033, though Medicare would continue operating with incoming revenue covering about 89% of scheduled Part A expenses. Medicare Part B spending is projected to grow 8.5% annually through 2030, while Part D spending may rise 9.4% annually.
Oz said the administration intends to use the tools available to address the financing challenge, including negotiations, fraud enforcement, drug-price reforms and technology.
“I want to point out that drug prices and affordability are bipartisan beneficial issues,” Oz said. “We want to use every tool we have in our toolkit to get there.”
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image Credit: Diannie Chavez via Imagn Images
