Though Medicare Advantage was designed to help lower federal healthcare expenditures, recent reporting from The New York Times has thrust allegations of payers defrauding the government through the program back into the limelight.
To date, nearly every major insurance company has been accused of or settled allegations of Medicare Advantage fraud. The Justice Department or HHS' inspector general have claimed UnitedHealth Group, Elevance Health, Kaiser Permanente, Humana, CVS Health, Cigna, Highmark and SCAN Group have all abused the program through elaborate schemes that make patients appear sicker than they actually are — thereby leading to higher payments from CMS.
Becker's compiled the perspectives of seven healthcare leaders to understand the complexity of this issue and gain a deeper understanding of what the industry really believes is occurring.
Michael Stearns, MD, specialized consulting director of medical informatics, Wolters Kluwer
"It's challenging because there's more specific guidance for evaluation management coding for providers than there are for risk adjustment coding," he told Becker's. "There is a lot of official guidance out there for Medicare and Medicare Advantage, but it doesn't really tell you exactly which things would work or would not work. The flexibility of interpretation around current guidelines has really opened the door for, you know, interpretation, meaning that one plan will say, 'if it's mentioned anywhere in the record as a chronic condition, we're going to report it, even if there's no specific evidence of evaluation management.' That's a solid argument and I think that's been pursued. Others say, 'if it's mentioned in a specific section of the note such as in the assessment, then that's reportable.' You can make an argument that there's support for that in the Medicare requirements.
When I talk to professionals in the industry, they feel there will be an increased focus on supporting documentation, meaning that if I diagnose on a patient's record and I don't mention medications, that's probably not good to sit on right now. If you take a conservative approach, people have been doing it their way for years and of course they're not going to just say, 'oh, that's a new way of looking at it.' They're going to be pretty defensive of their position, so that's another challenge.
People interpret official guidelines for Medicare in different ways, but once they have an interpretation, they create a policy around it at their organization and then everyone is following the same lead. Most coding professionals are terrified of being audited and failing for fraud, and the industry is extremely aware of these activities."
Judith Stein, executive director, Center for Medicare Advocacy
"It's beyond comprehension that the subject of [the NYT] article is not a major scandal," she wrote in the newspaper's opinion page Oct. 23. "Not only are wasteful payments to private Medicare Advantage plans straining Medicare's finances, but they are also crowding out expansion of benefits for the half of Medicare beneficiaries who choose to remain in traditional Medicare. For example, even using the article's conservative overpayment estimates ($12 billion in 2020), the overpayments are "enough to cover hearing and vision care for every American over 65."
Donald Berwick, former CMS administrator
"The shortcomings of CMS's Hierarchical Condition Category (HCC) risk adjustment system have been well described since its full implementation in 2006," he wrote in Health Affairs. "Simply stated, MA plans can draw enormous overpayments by submitting diagnosis codes that create more HCCs per person. While the codes are, presumably, accurate, the dollar coefficients used in MA payment logic are inflated because they were modeled using markedly under-coded FFS data. “Risk-score gaming” overpayments come from inaccurate pricing of HCCs. Congress and every administration since 2006 have avoided fixing this inaccuracy, in part because of plans' enormous political clout."
Mary Beth Donahue, president and CEO of the Better Medicare Alliance
"The [NYT] story cherry-picks allegations — in some cases more than a decade old — to paint an inaccurate and incomplete picture of a vital part of Medicare that is providing better and far more affordable health care for 30 million seniors," she told Becker's. "The story ignores basic facts, including that Medicare Advantage saves seniors nearly $2,000 per year — savings that are particularly important for seniors on fixed incomes in a period of inflation on household costs."
U.S. Attorney Damian Williams, Southern District of New York
"As alleged, Cigna obtained tens of millions of dollars in Medicare funding by submitting to the government false and invalid diagnoses for its Medicare Advantage plan members," he said in a news release. "Cigna knew that, under the Medicare Advantage reimbursement system, it would be paid more if its plan members appeared to be sicker. This office is dedicated to holding insurers accountable if they seek to manipulate the system and boost their profits by submitting false information to the government."
Richard Gilfillan, MD, former president and CEO of Geisinger Health Plan
"Medicare Advantage overpayments are a political third rail," he told the NYT. "The big health care plans know it's wrong, and they know how to fix it, but they’re making too much money to stop. Their CEOs should come to the table with Medicare as they did for the Affordable Care Act, end the coding frenzy, and let providers focus on better care, not more dollars for plans."
Jack Resneck Jr., MD, AMA president
"Unchecked market power among insurers is a formula for higher premiums, lower coverage, and inadequate levels of patient care, concerns of great relevance to Medicare Advantage," he said in a news release. "Most large Medicare Advantage insurers are accused of fraud and flouting the authority of federal agencies. [A] new AMA study shines a light on the lack of competition in Medicare Advantage markets across the country and will help regulators and lawmakers better scrutinize anticompetitive insurer behavior that harms patients and physicians in an industry where exploitative business practices are already commonplace."