Audits Continue to Show Inadequate CMS Oversight of Medicare Advantage Plans

October 19th, 2016

Thirty-five out of 37 Government Accountability Office (GAO) audits reveal that some private Medicare Advantage plans fraudulently billed the federal government, according to data obtained by the Center for Public Integrity (CPI).

The audits date back to 2007 and the money has been paid back, according to the CPI report. Among the insurers were five Humana health plans, three UnitedHealthcare plans, and four WellPoint plans. Medicare Advantage is a private option to standard Medicare that enrolls more than 17 million seniors. In 2014, Medicare paid the health plans more than $160 billion.

The overbilling comes from errors in the so-called “risk-score” that adjusts payment to the Medicare Advantage plans, giving a lower rate for patients who are healthy and a higher rate for sicker patients. Insurance companies were purportedly manipulating risk scores to receive larger payments, especially for conditions such as diabetes, depression and drug addiction, a practice known as “upcoding,” according to CPI.

The GAO has called for improvements to curb excess charges linked to faulty risk scores and has been critical of CMS for not ramping up the internal Medicare Advantage audit process. An internal audit by CMS in 2014 revealed that $14.1 billion were improperly billed by Medicare Advantage plans in 2013. That money has largely been unrecovered, according to CPI.