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Dec 12, 2019
Business News: U.S. watchdog finds $6.7 billion in questionable Medicare payments to insurers
(Reuters)
- A U.S. government watchdog is raising fresh concerns that health
insurers are exaggerating how sick Medicare patients are, receiving
billions of dollars in improper payments as a result.
FILE
PHOTO: Devices used to take blood pressure, temperature, and examine
eyes and ears rest on a wall inside of a doctor's office in New York
March 22, 2010. REUTERS/Lucas Jackson
Health
insurers selling Medicare Advantage plans to seniors and the disabled
received an estimated $6.7 billion in 2017 after adding diagnoses to
patients’ files that were not supported by their medical records,
according to a report released on Thursday by the U.S. Health and Human
Services (HHS) Inspector General’s Office.
Inspectors found that
Medicare Advantage insurers had added diagnoses for diabetes, heart
disease and other conditions in 99.3% of chart reviews of patient
information, even though they did not appear in records from doctors,
hospitals or other medical providers. Insurers deleted incorrect
diagnoses less than 1% of the time, they found.
The additional
diagnoses boosted government payments to insurers by an estimated $6.9
billion, while the deleted information trimmed payouts by nearly $200
million, producing a net benefit of $6.7 billion for the companies.
“We
could not see any services with the diagnosis and that raised a number
of concerns,” Linda Ragone, a regional inspector general in Philadelphia
and co-author of the report, said in a phone interview. “There is a
vulnerability here that needs to be addressed.”
The report
highlighted a group of 4,616 Medicare Advantage enrollees for whom
insurers added a diagnosis that resulted in a higher payment, even
though there was no record of the person receiving any medical services
during the year under review.
Medicare Advantage plans are
privately-run alternatives to traditional Medicare. They served 22
million people – or 1 in 3 of those eligible for the government
healthcare program – at a cost of $210 billion in 2018.
The report did not identify specific insurers. UnitedHealth Group Inc (UNH.N), Humana Inc (HUM.N) and CVS Health Corp (CVS.N)
through its ownership of Aetna, are among the biggest sellers of
Medicare Advantage plans. Together, the three companies have 54% of the
market, according to the Kaiser Family Foundation.
America’s
Health Insurance Plans (AHIP), an industry trade group, said the rate of
improper payments in the Medicare Advantage program has been
decreasing.
“Everyone agrees that Medicare Advantage payments
must be fair and accurate, and we continue to work with (Medicare) to
improve payment accuracy,” said AHIP spokeswoman Kristine Grow.
The
U.S. government pays Medicare Advantage insurers based on a risk score
for each enrollee. The formula pays more for sicker patients, creating a
financial incentive for insurers to inflate risk scores.
The
U.S. Centers for Medicare and Medicaid Services (CMS) should be doing
more to prevent insurers from exploiting this vulnerability, the
inspector general said.
In a Nov. 1 letter to the inspector
general’s office cited in the report, CMS challenged the $6.7 billion
estimate of payments linked to chart reviews as too high. The agency
agreed with the report’s recommendations for increased oversight and
audits.
CMS in a statement said it is “committed to ensuring that
Medicare Advantage plans submit accurate information to CMS so that
payments to plans are appropriate.”
Prior to these findings,
Medicare estimated it had made $40 billion in overpayments to insurers
from 2013 to 2016 due to diagnoses submitted by health plans not
supported by medical records.
Reporting by Chad Terhune; Editing by Bill Berkrot
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