Federal officers resolved greater than a decade in the past to crack down on whopping authorities overpayments to personal Medicare Advantage medical health insurance plans, which had been siphoning off billions of tax {dollars} yearly.
But Centers for Medicare & Medicaid Services officers have but to demand any refunds — and through the years the non-public insurance policy have morphed right into a politically potent juggernaut that has signed up greater than 33 million seniors and is aggressively lobbying to stave off cuts.
Critics have watched with alarm because the trade has managed to deflate or deflect monetary penalties and steadily acquire clout in Washington via political contributions; tv promoting, together with a 2023 Super Bowl function; and different actions, together with mobilizing seniors. There’s additionally a revolving door, by which senior CMS personnel have cycled out of presidency to take jobs tied to the Medicare Advantage trade after which returned to the company.
Sen. Chuck Grassley (R-Iowa) mentioned Medicare Advantage fraud “is wasting taxpayer dollars to the tune of billions.”
“The question is, what’s CMS doing about it? The agency must tighten up its controls and work with the Justice Department to prosecute and recover improper payments,” Grassley mentioned in a press release to KFF Health News. “Clearly that’s not happening, at least to the extent it should be.”
David Lipschutz, an lawyer with the Center for Medicare Advocacy, a nonprofit public curiosity legislation agency, mentioned policymakers have an unsettling historical past of yielding to trade stress. “The health plans throw a temper tantrum and then CMS will back off,” he mentioned.
Government spending on Medicare Advantage, which is dominated by massive medical health insurance corporations, is anticipated to hit $462 billion this 12 months.
New particulars of the federal government’s failure to rein in Medicare Advantage overcharges are rising from a Department of Justice civil fraud case filed in 2017 in opposition to UnitedHealth Group, the insurer with probably the most Medicare Advantage enrollees. The case is pending in Los Angeles. The DOJ has accused the enormous insurer of dishonest Medicare out of greater than $2 billion by mining affected person data to search out further diagnoses that added income whereas ignoring overcharges that may have lowered payments. The firm denies the allegations and has filed a movement for summary judgment.
Records from the courtroom case are surfacing because the Medicare Advantage trade ramps up spending on lobbying and public relations campaigns to counter mounting criticism.
While critics have argued for years that the well being plans cost taxpayers too much, the trade additionally has come beneath fireplace extra not too long ago for allegedly scrimping on vital health care, even dumping hundreds of thousands of members whose well being plans proved unprofitable.
“We recognize this is a critical moment for Medicare Advantage,” mentioned Rebecca Buck, senior vice chairman of communications for the Better Medicare Alliance, which types itself as “the leading voice for Medicare Advantage.”
Buck mentioned initiatives aimed toward slashing authorities funds might immediate well being plans to chop very important companies. “Seniors are saying loud and clear: They can’t afford policies that will make their health care more expensive,” she mentioned. “We want to make sure Washington gets the message.”
AHIP, a commerce group for well being insurers, additionally has launched a “seven-figure” campaign to advertise its view that Medicare Advantage offers “better care at a lower cost,” spokesperson Chris Bond mentioned.
Revolving Door
CMS, the Baltimore-based company that oversees Medicare, has lengthy felt the sting of trade stress to gradual or in any other case stymie audits and different steps to cut back and get better overpayments. These points typically appeal to little public discover, regardless that they’ll put billions of tax {dollars} in danger.
In August, KFF Health News reported how CMS officers backed off a 2014 plan to discourage the well being plans from overcharging amid an trade “uproar.” The rule would have required that insurers, when combing sufferers’ medical data to establish underpayments, additionally search for overcharges. Health plans have been paid billions of {dollars} via the info mining, generally known as “chart reviews,” in response to the federal government.
The CMS press workplace declined to answer written questions posed by KFF Health News. But in a press release, it referred to as the company a “good steward of taxpayer dollars” and mentioned partially: “CMS will continue to ensure that the MA program offers robust and stable options for people with Medicare while strengthening payment accuracy so that taxpayer dollars are appropriately spent.”
Court data from the UnitedHealth case present that CMS efforts to tighten oversight stalled amid years of technical protests from the trade — resembling arguing that audits to uncover overpayments had been flawed and unfair.
In one case, Jeffrey Grant, a CMS official who had decamped for a job supporting Medicare Advantage plans, protested the audit formulation to a number of of his former colleagues, in response to a deposition he gave in 2018.
Grant has since returned to CMS and now’s deputy director for operations on the company’s Center for Consumer Information and Insurance Oversight. He declined to remark.
At least a dozen witnesses within the UnitedHealth case and an analogous DOJ civil fraud case pending in opposition to Anthem are former rating CMS officers who departed for jobs tied to the Medicare Advantage trade.
Marilyn Tavenner is one. She led the company in 2014 when it backed off the overpayment regulation. She left in 2015 to move trade commerce group AHIP, the place she made greater than $4.5 million throughout three years on the helm, in response to Internal Revenue Service filings. Tavenner, who’s a witness within the UnitedHealth case, had no remark.
And in October 2015, as CMS division chiefs had been batting round concepts to crack down on billing abuses, together with reinstating the 2014 regulation on knowledge mining, the company was led by Andy Slavitt, a former govt vice chairman of the Optum division of UnitedHealth Group. The DOJ fraud go well with focuses on Optum’s knowledge mining program.
In the authorized proceedings, Slavitt is recognized as a “key custodian regarding final decision making by CMS” on Medicare Advantage.
“I don’t have any awareness of that conversation,” Slavitt advised KFF Health News in an electronic mail. Slavitt, who now helps run a well being care enterprise capital agency, mentioned that in his CMS tenure he “was recused from all matters related to UHG.”
‘Improper’ Payments
CMS officers first laid plans to curb escalating overpayments to the insurers greater than a decade in the past, in response to paperwork filed in August within the UnitedHealth case.
In a January 2012 presentation, CMS officers estimated they’d made $12.4 billion price of “improper payments” to Medicare Advantage teams in 2009, principally as a result of the plans did not doc that sufferers had the situations the federal government paid them to deal with, in response to the courtroom paperwork.
As a treatment, CMS got here up with an audit program that chosen 30 plans yearly, taking a pattern of 201 sufferers from every. Medical coders checked to ensure affected person information correctly documented well being situations for which the plans had billed.
The 2011 audits discovered that 5 main Medicare Advantage chains did not doc from 12.3% to 25.8% of diagnoses, mostly strokes, lung situations, and coronary heart illness.
UnitedHealth Group, which had the bottom price of unconfirmed diagnoses, is the one firm named within the CMS paperwork within the case file. The identities of the 4 different chains are blacked out within the audit data, that are marked as “privileged and confidential.”
In a May 2016 non-public briefing, CMS indicated that the well being plans owed from $98 million to $163 million for 2011 relying on how the overpayment estimate was extrapolated, courtroom data present.
But CMS nonetheless hasn’t collected any cash. In a shock motion in late January 2023, CMS introduced that it will accept a fraction of the estimated overpayments and never impose main monetary penalties till 2018 audits, which have but to get underway. Exactly how a lot plans will find yourself paying again is unclear.
Richard Kronick, a former federal well being coverage researcher and a professor on the University of California-San Diego, mentioned CMS has largely did not rein in billions of {dollars} in Medicare Advantage overpayments.
“It is reasonable to think that pressure from the industry is part of the reason that CMS has not acted more aggressively,” Kronick mentioned.
CMS data present that officers thought-about strengthening the audits in 2015, together with by limiting well being plans from conducting “home visits” to sufferers to seize new analysis codes. That didn’t occur, for causes that aren’t clear from the filings.
In any case, audits for 2011 via 2015 “are not yet final and are subject to change,” CMS official Steven Ferraina said in a July courtroom affidavit.
“It’s galling to me that they haven’t recovered more than they have,” mentioned Edward Baker, a whistleblower lawyer who has studied the difficulty.
“The government needs to be more aggressive in oversight and enforcement of the industry,” he mentioned.
Senior CMS official Cheri Rice really useful within the October 2015 electronic mail thread with key workers that CMS may dedicate extra sources to supporting whistleblowers who report overbilling and fraud.
“We think the whistleblower activity could be as effective – or even more effective – than CMS audits in getting plans to do more to prevent and identify risk adjustment overpayments,” Rice wrote.
But the handful of circumstances that DOJ may realistically convey in opposition to insurers can not substitute for CMS fiscal oversight, Baker mentioned.
“Unfortunately, that makes it appear that fraud pays,” he mentioned.
Spending Surge
In December, a bipartisan group of 4 U.S. senators, together with Bill Cassidy (R-La.), wrote to CMS to voice their alarm in regards to the overpayments and different issues. “It’s unclear why CMS hasn’t taken stronger action against overpayments, despite this being a longstanding issue,” Cassidy advised KFF Health News by electronic mail.
In January, Sen. Elizabeth Warren (D-Mass.) and Rep. Pramila Jayapal (D-Wash.) called for CMS to crack down, together with by proscribing use of chart evaluations and residential visits, generally known as well being danger assessments, to extend plan revenues.
Cassidy, a doctor, mentioned that “upcoding and abuses of chart review and health risk assessments are well-known problems CMS could address immediately.”
Advocates for Medicare Advantage plans, whose greater than 33 million members comprise over half of individuals eligible for Medicare, fear that an excessive amount of concentrate on fee points may hurt seniors. Their research shows most seniors are proud of the care they obtain and that the plans sometimes value them much less out-of-pocket than conventional Medicare.
Buck, the spokesperson for the Better Medicare Alliance, mentioned that because the annual open enrollment period begins in mid-October, seniors may even see “fewer benefits and fewer plan choices.”
The group has ramped up complete spending lately to maintain that from taking place, IRS filings show.
In 2022, the newest 12 months obtainable, the Better Medicare Alliance reported bills of $23.1 million, together with greater than $14 million on promoting and promotion, whereas in 2023, it paid for a Super Bowl ad that includes seniors in a bowling alley and left viewers with the message: Cutting Medicare Advantage was “nuts.”
Bruce Vladeck, who ran CMS’ predecessor company from 1993 via 1997, mentioned that when authorities officers first turned to Medicare managed care teams within the Nineteen Nineties, they rapidly noticed well being plans enlist members to assist press their agenda.
“That is different from most other health care provider groups that lobby,” Vladeck mentioned. “It’s a political weapon that Medicare Advantage plans have not been at all reluctant to use.”
The Better Medicare Alliance reported lobbying on 18 payments this 12 months and final, in response to OpenSecrets. Some are particular to Medicare Advantage, resembling one requiring insurers to report more detailed data about remedies and companies and one other to expand the benefits they’ll supply, whereas others extra broadly concern well being care prices and companies.
Proposed reforms apart, CMS seems to consider that eliminating well being plans that allegedly rip off Medicare may go away susceptible seniors within the lurch.
Testifying on behalf of CMS in a May 2023 deposition within the UnitedHealth Group go well with, former company official Anne Hornsby mentioned some seniors may not “find new providers easily.” Noting UnitedHealth Group is the only largest Medicare Advantage contractor, she mentioned CMS “is interested in protecting the continuity of care.”
Fred Schulte:
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@FredSchulte
Holly Okay. Hacker:
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