This week the CT Mirror published a Kaiser Health News article about overpayments to private Medicare plans. The article, originally titled “Insurers Running Medicare Advantage Plans Overbill Taxpayers By Billions As Feds Struggle To Stop It” underscores the need for improved oversight and enforcement of Medicare Advantage plans.
According to the Kaiser Health News article, MA plans have overcharged the Medicare program and American taxpayers by nearly $30 billion dollars in the last three years alone. The unjustified charges stem from “risk scores” used to assess payments for every Medicare Advantage member. The formula, approved by Congress in 2003 to try to keep plans from cherry-picking the healthiest beneficiaries, pays higher rates for sicker patients than for people in good health. Unfortunately, many plans manipulate the scores to increase revenues while not actually attending to the neediest patients.
CMS began auditing the scores in 2007, and quickly discovered that they “could confirm just 60% of the more than 20,000 medical conditions CMS had paid the plans to treat.” Audits weren’t done from 2008-2010 due to industry backlash and fears that plans would withdraw from the Medicare Advantage program, as was the case with the original “Medicare+Choice” private plans in the 1990s.
CMS officials restarted audits in 2011. Penalties were expected to be assessed by 2016, but were postponed, once again due to industry pressure. The current CMS plan would begin taking back a portion of the overpayments by 2020.