Why Medicare Advantage costs taxpayers billions more than it should
First in a three-part series. See sidebar.
In South Florida, one of the nation's top privately-run Medicare insurance plans faces a federal investigation into allegations that it overbilled the government by exaggerating how sick some of its patients were.
In the Las Vegas area, private health care plans for seniors ran up more than $100 million in added Medicare charges after asserting patients they signed up also were much sicker than normal — a claim many experts have challenged.
In Rochester, New York, a Medicare plan was paid $41 million to treat people with serious diseases — even though the plan couldn't prove the patients in fact had those diseases.
These health plans and hundreds of others are part of Medicare Advantage, a program created by Congress in 2003 to help stabilize health care spending on the elderly. But the plans have sharply driven up costs in many parts of the United States — larding on tens of billions of dollars in overcharges and other suspect billings based in part on inflated assessments of how sick patients are, an investigation by the Center for Public Integrity has found.
Dominated by private insurers, Medicare Advantage now covers nearly 16 million Americans at a cost expected to top $150 billion this year. Many seniors choose the managed-care Medicare Advantage option instead of the traditional government-run Medicare program because it fills gaps in coverage, can cost less in out-of-pocket expenses and offers extra benefits, such as dental and eye care.
But billions of tax dollars are misspent every year through billing errors linked to a payment tool called a "risk score," which is supposed to pay Medicare Advantage plans higher rates for sicker patients and less for those in good health.
Government officials have struggled for years to halt health plans from running up patient risk scores and, in many cases, wresting higher Medicare payments than they deserve, records show.
The Center's findings are based on an analysis of Medicare Advantage enrollment data from 2007 through 2011, as well as thousands of pages of government audits, research papers and other documents.
Federal officials who run the Medicare program repeatedly refused to be interviewed or answer written questions.
Among the findings: