CMS Director Mehmet Oz just directed the agency to double down on auditing Medicare Advantage (MA) plans to root out waste and fraud. In the same week, Senate Republicans signalled the same scrutiny. Americans should be cheering these moves that could keep Medicare sustainable.
For years, lawmakers and agencies like CMS alike have seen evidence that MA plan insurers routinely overcharge the government by billions, leaving the average taxpayer to foot the bill. This fraud is unacceptable – and it’s just for Congress and the Administration to stomp it out.
Starting with this audit, Director Oz ought to send a clear message to insurers that have practiced rampant abuse of taxpayer dollars: We have zero tolerance for fraud, waste, and abuse.
Medicare Advantage, when created, allowed Medicare patients to have a choice of a private coverage option. But the very makeup of these plans invite insurers to game the system.
Private insurers that run MA plans will take any chance they can to increase their margins and bleed Medicare dry. Countless MA insurers charged the government for diagnoses based on shoddy health screening done in-house, according to a 2021 Inspector General’s report. It’s not a new problem, either – MA overbilling goes back to 2012, when CMS found $12 billion of this fraud under the Obama administration.
The fraud has only ballooned since then. Today, MA insurers bill $140 billion in excess of what treatments were required for U.S. patients, according to the Center for Medicare Advocacy. Some health plans over-bill by up to $5,888 per patient for standard treatments.
Should Americans expect this additional cash flow to go to patients? Of course not. Nearly one-third of all American healthcare expenditures go to administrative costs and fees, according to a survey from the Commonwealth Fund. That means more money towards suits and less to the ‘scrubs’ helping the patients.
The government must take a stand against this misuse of funds. CMS Director Oz is starting now. Here’s a few pointed suggestions.
CMS needs to step in at the root of the problem: “Upcoding.” Medicare Advantage patients are diagnosed with more severe conditions than they actually have, if they even have them at all. The result is a much larger check for the insurers running the MA plans, coming right out of the coffers of American taxpayers.
The worst offenses happen outside the doctor’s office. Insurers often send non-physician employees to patients’ homes, administer “Health Risk Assessments”, which results in the upcoding. United Healthcare, who runs more MA plans and who stands accused of upcoding more than any than any other insurer, employs or is associated with 10% of America’s practicing physicians. It’s hard to imagine that this perverse incentive has not been used by United to help their bottom line.
CMS Director Oz should work with lawmakers to bar insurers from upcoding and mandate that actual non-conflicted physicians perform screenings for insurance purposes. These two simple changes could prevent insurers from ripping off the government – and the government can prevent these insurers from mishandling millions of patients’ illnesses.
Dr. Oz would be wise to have CMS broadcast exactly which insurers are responsible for upcoding, so Americans interested in purchasing Medicare Advantage plans can make well informed choices.
Lastly, large insurance company subsidiaries have a history of unfairly clawing back money in the pharmacy space. Any fraudulently collected upcoded money must be clawed back with deserved impunity.
It’s more important than ever to start now. More than 40 million Americans are expected to enroll in MA plans by 2030. Insurers must be thrilled at the growing opportunity to defraud the government, but policymakers are worried. The more seniors and at-risk patients enrolled in MA plans, the more that lawmakers need to control costs without denying care. Banning practices like upcoding and Health Risk Assessments prevent these costs from spiraling.
Director Oz has in the past been an outspoken advocate for Medicare Advantage. Yet while Oz’s opponents called him out for pushing pro-insurance talking points, this audit shows that he’s anything but a shill. Taking MA reforms a step further allows him make good on his promise to “stop unscrupulous people from stealing from vulnerable Americans.” He and CMS as a whole must hold insurers accountable for their actions to make Medicare as solvent as it can be.
Auditing insurers is a great place to start – but it’s only a start. To fully eradicate this waste, fraud, and abuse, CMS needs to back up its words with actions.
Marion Mass, M.D. is a Bucks County pediatrician and the co-founder of the Practicing Physicians of America.
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