Two recent reports on Medicare Advantage plan billing practices reveal that Medicare Advantage plans are a bad deal for taxpayers. A number of them are bilking taxpayers of billions of dollars. A new study by the Department of Health and Human Services shows that some Medicare Advantage plans are “upcoding” or, in English, charging Medicare for more costly services than they are providing. Because Medicare pays Medicare Advantage plans more to treat patients who are sicker, some of them charge Medicare as if their patients are in worse health than they actually are.
Another study by the Center on Public Integrity determined that “billing errors” by Medicare Advantage plans led the government to overpay them nearly $70 billion between 2008 and 2013. Not surprisingly, in many parts of the country, the cost of caring for people with Medicare through these private plans is as much as 25% more than traditional Medicare. Of note, a large number of Medicare Advantage plans have not succeeded at controlling Medicare spending, as many lawmakers had suggested they would when they were first created in 2003.
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