Privately run Medicare plans, fresh off a lobbying victory that reversed proposed budget cuts, face new scrutiny from government investigators and whistleblowers who allege that plans have overcharged the government for years.
Federal court records show at least a half dozen whistleblower lawsuits alleging billing abuses in these Medicare Advantage plans have been filed under the False Claims Act since 2010, including two that just recently surfaced.
The suits have named insurers from Columbia, S.C., to Salt Lake City to Seattle, and plans which have together enrolled millions of seniors. Lawyers predict more whistleblower cases will surface. The Justice Department also is investigating Medicare risk scores. Though specific allegations vary, the whistleblower suits all take aim at these risk scores. Medicare uses the scores to pay higher rates for sicker patients and less for people in good health. But officials were warned as early as 2009 that some plans claim patients are sicker than they actually are to boost their payments.
Privately run Medicare Advantage plans have signed up more than 17 million members, about a third of the people eligible for Medicare, and are poised to get bigger. Earlier this month, the industry overturned proposed cuts sought by the Obama administration for a third straight year, instead winning a modest raise in payment rates for the programs. Medicare Advantage resonates with many seniors for its low out-of-pocket costs. It’s also winning favor with some health policy experts who argue these managed care plans can offer higher quality care than standard Medicare, which pays doctors and hospitals on a fee-for-service basis.
Karen Ignagni, the chief executive officer of America’s Health Insurance Plans, the industry’s trade group, called the government’s change of heart “a notable step to provide stable funding.” “It shows the incentives provided for whistleblowers are working well, and all the other controls and detection systems are failing miserably.”