Private insurers that offer a “Medicare Advantage” plan have milked Medicare’s public coffers fraudulently for billions of dollars.
Medicare is among the most popular and essential social programs in the United States, providing healthcare coverage to most working people who are over 65.
Medicare Advantage was a private-sector alternative to Medicare designed about 20 years ago by Congress to encourage insurance companies to find “innovative” ways to provide better care at lower cost. They want us to believe that private industry can do things for less, right?
The plans are made to sound attractive; great deals, that cover some dental and vision care along with basic healthcare, often with lower premiums. The money that pays for Medicare Advantage comes out of federal Medicare funds and contribute to gutting the public program.
Of the top 10 insurance companies providing Medicare Advantage, 8 have been caught overbilling and 5 have been accused of fraud by the federal government. These 8 insurance companies make up over 80% of all Medicare Advantage plans.
The companies accused are United Health Group (27.1% of market), Humana (17.4%), CVS Health (10.7%), Elevance Health (6.5%), Kaiser Permanente (6.1%), Centene (5.0%), Blue Cross Blue Shield of Mich. (2.2%), Cigna (1.9%), Highmark (1.3%), and Scan Group (0.9%).
Whistleblowers in the United Health Group, by far the largest provider of Medicare Advantage (over 27% of Medicare Advantage plans), provided evidence of fraud. Audits of fraud cases by the New York Times, inspector general audits and independent watchdog groups have outlined billions of dollars in fraudulent claims. Mostly this has involved companies employing doctors to dig up old diagnoses so the insurance companies can charge the government fraudulently and inflate their profits. Kaiser Permanente offered bottles of champagne or bonus checks to doctors who could apply the higher-ticket-item-diagnosis codes to their patients.
The government pays the private insurers a fixed rate for each person who enrolls into Medicare Advantage and pays more for the people who are sickest. Offering a profit-driven industry more money for the sicker patients did not lead the insurance companies to actually provide more services to these sickest patients, but rather to balloon their profits by inflating the number of diagnoses for each patient. The “innovation” these companies are known for isn’t to promote better health or provide more streamlined services, but to come up with new ways to make the largest profits possible.
Capitalism is full of innovative surprises!
Medicare Advantage overbilling exceeds entire agency budgets
|Medicare Advantage overbilling:||Between $12 and $25 billion|
|NASA budget:||$21.5 billion|
|Children’s Health Insurance Program (CHIP) budget:||$16.9 billion|
|U.S. Customs and Border Protection budget:||$16.7 billion|
|Federal Bureau of Investigation budget:||$9.8 billion|
|Environmental Protection Agency budget:||$8.7 billion|
|Federal prison system budget:||$7.8 billion|
Sources: White House Office of Management and Budget; Medicare Payment Advisory Commission; Richard Kronick and F. Michael Chua
via The New York Times