On October 4, 2023, Physicians for a National Health Program (PNHP) released a report titled “Our Payments Their Profits”, showing that insurance companies offering Medicare Advantage (MA) plans are overpaid by up to $140 billion a year by Medicare.
According to an article posted by Common Dreams, titled “Medicare Advantage Overbills Taxpayers by $140 Billion a Year—Enough to Wipe Out Medicare Premiums” by Jake Johnson (Oct. 4, 2023), the report notes that the amount of wasteful overpayments to MA plans “could be used to completely eliminate Medicare Part B premiums or fully fund Medicare’s prescription drug program” among other uses.
Similarly, an article posted by The Lever titled “Insurers Are Gaming Medicare — To The Tune Of $140 Billion” by Matthew Cunningham-Cook and Lucy Dean Stockton (Oct. 4, 2023) notes that:
The researchers additionally found that seniors could save over $1,800 in annual fees taken from their Social Security checks if the government redirected what it spends subsidizing Medicare Advantage plans to instead reduce premium costs. Under the current arrangement, “traditional” Medicare pays about $12,000 a year to private Medicare Advantage insurers for every patient whose care they “manage.”
In related news about Medicare Advantage overpayments, the Justice Department announced that one MA insurer – Cigna Group – agreed to pay over $172 million to “resolve allegations that it violated the False Claims Act”, according to Bloomberg Law, “Cigna Group Resolves Allegations of False Claim Act Violations” (Oct 2, 2023). The article states:
The company allegedly submitted and failed to withdraw inaccurate and untruthful diagnosis codes for its Medicare Advantage Plan enrollees so that it could increase its payments from Medicare, according to the department.
Cigna has entered into a five-year corporate integrity agreement with the US Department of Health and Human Services Office of Inspector General that requires annual risk assessments, an independent review organization to conduct multi-faceted audits focused on risk adjustment data, and Cigna’s top executives and members of the Board of Directors to make certifications about its compliance measures, the DOJ said.
Why are private companies siphoning taxpayer dollars with no advantage to Medicare, when that money could be used for more benefits in the real Medicare program?
October 5, 2023 – D. Lipshutz