Health insurers have landed on the bad side of the US government after a watchdog raised concerns that the companies are distorting how sick Medicare patients are and, in turn, are getting billions of dollars in improper payments.
A report from the US Health and Human Services (HHS) Inspector General’s Office has determined that health insurers selling Medicare Advantage plans to seniors and the disabled were on the receiving end of around $6.7 billion in 2017 after adding medically unsupported diagnoses to the files of patients.
These additional diagnoses included diabetes, heart disease, as well as other conditions, which had been added to 99.3% of chart reviews of patient information. They did not, however, appear in doctors’ records or the records of other medical providers. The watchdog also found that insurers deleted incorrect diagnoses less than 1% of the time. Government payments to insurers were inflated by $6.9 billion as a result, while the deleted information cut payouts by almost $200 million, leading to a net benefit of $6.7 billion.
“We could not see any services with the diagnosis and that raised a number of concerns,” said Linda Ragone, a regional inspector general in Philadelphia and co-author of the report, in a phone interview with Reuters. “There is a vulnerability here that needs to be addressed.”
The report pointed to 4,616 Medicare Advantage enrollees for whom insurers added a diagnosis that then resulted in a higher payment. These plans are privately-run alternatives to Medicare and served a total of 22 million people in 2018.
While the report did not single out specific insurers, UnitedHealth Group Inc, Humana Inc, and CVS Health Corp through its ownership of Aetna are some of the biggest sellers of Medicare Advantage plans, all in all holding 54% of market share.
Nonetheless, industry trade group America’s Health Insurance Plans (AHIP) told Reuters that the rate of improper payments in the Medicare Advantage program has been falling.
“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 inspector general also noted in the report that the US Centers for Medicare and Medicaid Services (CMS) should be doing more to prevent insurers from taking advantage of this vulnerability. However, in a letter to the inspector general’s office, CMS challenged the $6.7 billion figure as too high, though the agency did agree with the report’s recommendations for more oversight and audits.
