Medicare Advantage plans require more scrutiny

Fred Schulte
June 25, 2014

Federal officials need to step up efforts to investigate fraud and abuse in Medicare Advantage health plans treating millions of elderly Americans, a top government investigator says.

Gary Cantrell, a deputy Inspector General with the Department of Health and Human Services said reviews are “hampered by a lack of accurate, timely and complete data that would facilitate oversight” of the fast-growing health insurance plans.

His comments came in testimony prepared for a Wednesday hearing of the oversight subcommittee of the House Committee on Energy and Commerce.

The hearing was called to assess fraud and abuse safeguards in Medicare, which last year covered about 51 million people at a cost to taxpayers of about $604 billion. Officials estimate that almost $50 billion of that amount was paid improperly, including $11.8 billion to Medicare Advantage plans.

A Center for Public Integrity investigation published earlier this month found as much as $70 billion of improper payments to Medicare Advantage plans from 2008 through last year.

The Center’s investigation attributed the suspect payments — mostly overcharges — to abuse of a government payment formula known as a risk score. Under the risk scoring method, health plans are paid higher rates for sicker patients and less for those in good health. But government officials have struggled for years to prevent health plans from overstating how sick patients are and driving up their Medicare payments.

At the hearing, federal officials touted a number of successes in their war on health care fraud — a record $4.3 billion was recovered in 2013 — even as they conceded that more needs to be done to protect tax dollars.

Centers for Medicare and Medicaid Services (CMS) officials unveiled a new data analysis system to identify overpayments and catch culprits. CMS said software prevented $210 million in improper payments in its second year of operation, including bogus billings for home health care services in South Florida, long a hotspot for Medicare fraud.

There’s more to this story. Click here to read the rest at the Center for Public Integrity.

This story is part of Medicare Advantage Money Grab. Billing errors cost taxpayers billions. Click here to read more stories in this investigation.

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Copyright 2014 The Center for Public Integrity. This story was published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.