Medicare Advantage Plans Overcharged Taxpayers by Millions

December 19, 2022

Medicare Advantage Plans Overcharged Taxpayers by Millions

A review of 90 government audits by Kaiser Health News reveals that Blue Cross and a number of other health insurers issuing Medicare Advantage plans have tried to sidestep regulations requiring them to document medical conditions the government paid them to treat.

The documents helped shed light on a secretive audit process that Medicare relies on to hold Medicare Advantage health plans — an alternative to original Medicare, primarily run by major insurance companies — accountable.

Medicare reimburses Medicare Advantage plans using a formula called a risk score that computes higher rates for sicker patients and lower ones for healthier people. However, federal officials have rarely demanded documentation verifying that patients have these conditions, or that they are as serious as claimed. Only about 5% of Medicare Advantage plans are audited yearly.

When auditors did become involved, they often found little or no support for diagnoses submitted by the Advantage plans, such as chronic obstructive pulmonary disease, diabetes or vascular disease.

“This investigative report suggests that the government is not doing enough to hold Medicare Advantage plans accountable,” said Robert Roach, Jr., President of the Alliance. “This should concern lawmakers, taxpayers, and all older Americans who rely on Medicare to get the medical services they need.”