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 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, Humana Inc and CVS Health Corp 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.
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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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