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Medicare Advantage plans bilking Medicare

Written by Diane Archer

Since its inception in 2002, Medicare Advantage, a program that allows private health insurers to contract with the government to provide Medicare benefits, has always cost the federal government more per person than fee-for-service Medicare. Over the last 15 years, not only have MedicareAdvantage plans not saved government money, but there’s strong evidence that these largely for-profit health care plans have been bilking the government of billions of dollars.

A whistleblower and former executive of UnitedHealth Group sued his former employer and 14 other Medicare Advantage plans in 2011 under the False Claims Act for playing with the health care records of their members in order to improperly inflate their Medicare payments. In an interview with the New York Times, Benjamin Poehling, a Finance Director at UnitedHealth, alleges that he made big bonuses the sicker he could paint UnitedHealth members and the more money he could bring to the company from Medicare.

The Poehling lawsuit was under seal until recently. And, it was one among many lawsuits that whistleblowers have filed alleging this type of fraud. In this case, the Justice Department has said it intends to sue UnitedHealth Group, giving the fraud claims greater weight. The Justice Department is also investigating Aetna, Humana, Health Net and Cigna.

According to the New York Times, some experts believe that the Medicare Advantage plan overcharges could amount to as much as $10 billion a year.

The government pays health plans more for sicker patients as a way to reward them for providing care to people with serious conditions. Medicare Advantage plans have always marketed their services to healthy people and never promoted their services to people with complex and costly conditions. They make more money providing little or no care to people and collecting a base fee from Medicare of around $10,000 a year per member.

That said, Medicare Advantage plans must provide care to their members in poor health. In these cases, Poehling charges, the health plans find ways to charge the government more than they should for their care.  The Government Accountability Office, GAO, reports that the Centers for Medicare and Medicaid Services found that in 2013 alone, it wrongly paid Medicare Advantage plans $14.1 billion, largely because of wrongful upcharges.

Meanwhile, UnitedHealth is suing the federal government to vacate a 2014 rule that requires Medicare Advantage plans not to exaggerate the diagnoses of their members.

Here’s more from Just Care:

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3 Comments

  • The crimigenic nature of this “Medicare Advantage” scheme is just one more reason elderly retirees should not be forced off of original Medicare and onto privatized products by large group employers as is presently being done in CT which is in the process of forcing approximately 49,000 elderly state retirees off of their traditional Medicare(with high quality supplement) onto “Medicare Advantage. ”
    The State claims the State will share the (corporate welfare) “higher reimbursement” rate with the insurers, cut spending on retiree health care by $130 million a year and “improve” retiree health. This gives the private insurers an enormous gift and enrollment bump which the industry turns around and claims shows how “popular” their plans are. This is false because these are forced enrollments against the retirees’ will. This is destructive of the Medicare trust fund. It seems scandalous that state and local governments should in effect collude with criminogenic corporations whose goal has always been to destroy Medicare for everyone. This appears to make state governments the beneficiaries of improper billing against the Medicare Trust Fund (paid for by federal taxpayers.) Bad for retirees and bad for all of us because it jeopardizes the Medicare Trust Fund.

  • Make jail time a certainty for the heads of these health companies and that should help put a stop to this.

  • I’m a Medicare Advantage member with Kaiser Permanente. If I decide this October to go with Medicare and drop Advantage, how do I get care from providers? Do I just show up at any medical provider?

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