![]() But most have been joined by the Justice Department, a step the government takes only if it believes the fraud allegations have merit. Many of the fraud lawsuits were initially brought by former employees under a federal whistle-blower law that allows them to get a percentage of any money repaid to the government if their suits prevail. The efforts to make patients look sicker and other abuses of the program have “resulted in billions of dollars in improper payments,” he said. “Medicare Advantage is an important option for America’s seniors, but as Medicare Advantage adds more patients and spends billions of dollars of taxpayer money, aggressive oversight is needed,” said Senator Charles Grassley of Iowa, who has investigated the industry. ![]() The more the plans are overpaid by Medicare, the more generous to customers they can afford to be. Medicare Advantage plans can limit patients’ choice of doctors, and sometimes require jumping through more hoops before getting certain types of expensive care.īut they often have lower premiums or perks like dental benefits - extras that draw beneficiaries to the programs. But for insurers that already dominate health care for workers, the program is strikingly lucrative: A study from the Kaiser Family Foundation, a research group unaffiliated with the insurer Kaiser, found the companies typically earn twice as much gross profit from their Medicare Advantage plans as from other types of insurance.įor people choosing between traditional Medicare and Medicare Advantage, there are trade-offs. The increased privatization has come as Medicare’s finances have been strained by the aging of baby boomers. It’s enough money that even a small increase in the average patient’s bill adds up: The additional diagnoses led to $12 billion in overpayments in 2020, according to an estimate from the group that advises Medicare on payment policies - enough to cover hearing and vision care for every American over 65.Īnother estimate, from a former top government health official, suggested the overpayments in 2020 were double that, more than $25 billion. The government now spends nearly as much on Medicare Advantage’s 29 million beneficiaries as on the Army and Navy combined. “Professionals can look at the same medical record in different ways,” he said. Many of the accusations reflect missing documentation rather than any willful attempt to inflate diagnoses, said Mark Hamelburg, an executive at AHIP, an industry trade group. They said their aim in documenting more conditions was to improve care by accurately describing their patients’ health. In statements, most of the insurers disputed the allegations in the lawsuits and said the federal audits were flawed. The fifth company, CVS Health, which owns Aetna, told investors its practices were being investigated by the Department of Justice. And four of the five largest players - UnitedHealth, Humana, Elevance and Kaiser - have faced federal lawsuits alleging that efforts to overdiagnose their customers crossed the line into fraud. And the insurers, among the largest and most prosperous American companies, have developed elaborate systems to make their patients appear as sick as possible, often without providing additional treatment, according to the lawsuits.Īs a result, a program devised to help lower health care spending has instead become substantially more costly than the traditional government program it was meant to improve.Įight of the 10 biggest Medicare Advantage insurers - representing more than two-thirds of the market - have submitted inflated bills, according to the federal audits. The government pays Medicare Advantage insurers a set amount for each person who enrolls, with higher rates for sicker patients. ![]() ![]() But a New York Times review of dozens of fraud lawsuits, inspector general audits and investigations by watchdogs shows how major health insurers exploited the program to inflate their profits by billions of dollars.
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