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Medicare anticipated that risk scoring fraud would accompany the reimbursement methodology, since provider diagnosis submissions directly impacted plan revenues. For example, in 2004 the Center on Budget and Policy Priorities clearly outlined the potential harm to the Medicare Advantage program, absent meaningful audits and sanctions for overstating Medicare beneficiaries’ burden of illness.
Nonetheless, there is growing concern that the existing audits are not sufficiently uncovering or deterring upcoding, and some Medicare Advantage Plans may be illegally pocketing billions of dollars in overpayments.
Such allegations came to light, for example, in a June 2015 NPR article that exposed the findings of a government audit that detected “widespread overbilling” at one of United Health’s Medicare Advantage Plans. The audit, completed in 2012, found that Medicare had paid too much for nearly half of a sample of patients enrolled at PacifiCare of Washington State, a subsidiary of United Health Group. (Of note, the audit was released to the Center for Public Integrity through a court order in a Freedom of Information Act lawsuit.)
These allegations do not appear to end with United Health. Indeed, in this same NPR article, the authors point to a previously confidential March 2012 CMS PowerPoint presentation, which “estimates payment errors in Medicare Advantage at $13.5 billion for 2010 and notes that health plans ‘have an incentive to submit more diagnoses’ in order to raise their payments.”
This article has raised a lot of eyebrows (and questions) on Capitol Hill. For example, Senate Judiciary Chairman Charles Grassley, recently questioned why the findings of he United Health audit were kept secret from the public. “The public’s business ought to be public, with few exceptions. An agency shouldn’t withhold internal deliberations unless there’s a really good reason for it, like a risk to national security. It seems to me that a discussion of a Medicare overpayment problem and what to do about it ought to be public,” Senator Grassley said in a statement.
However, the biggest takeaway might be that government audits are not a sufficient weapon in the fight against Medicare Advantage Plan risk scoring fraud. The government needs insiders to step forward and expose practices and providers that inflate the health risk of plan members. When qui tam whistleblowers bring such cases to the Justice Department, these cases should be a top priority.