Investigation: Feds overpaid $70B to Medicare Advantage

The federal government wrongfully paid Medicare Advantage programs almost $70 billion, mostly through overbilling between 2008 and 2013, according to a new report.


The Center for Public Integrity released the first of its four part investigative series Wednesday on Medicare Advantage payments that examines the use of risk scores used by providers to charge the government more for sicker patients.

The CPI found that between 2007 and 2011, scores for Medicare Advantage patients grew twice as fast when compared to ordinary Medicare patients in more than 500 counties. The report cites government audits of six Medicare Advantage plans in 2007 alone with nearly $650 million in overpayments. 

“In more than 200 of these counties, the cost of some Medicare Advantage plans was at least 25 percent higher than the cost of providing standard Medicare coverage. The wide swing in costs was most evident in five states: South Dakota, New Mexico, Colorado, Texas and Arkansas,” says the report. “The data analysis also found that seemingly tiny variations in risk scores can boost taxpayer costs enormously — especially in health plans that are growing fast.”

Medicare Advantage covers nearly 16 million people and is expected to cost more than $150 billion this year. However, reviews by the Centers for Medicare and Medicaid Services have also found billing errors in 30 percent or more of patient files who are covered under such plans.

“Government officials have struggled for years to halt health plans from running up patient risk scores and, in many cases, wresting higher Medicare payments than they deserve, records show,” according to the report.

The CPI has asked CMS to release information on Medicare Advantage plans suspected of overcharging for services, but they have refused on policy grounds.

Now the center is suing CMS to try and force the agency to release copies of program audits, billing data and the identities of any health plans suspected of overcharging the government under Medicare Advantage.

— This article was updated at 6:50 a.m.