Apr 13, 2022 - Health

Whistleblower explains how Medicare Advantage plan bilked millions

Illustration of stacks of one hundred dollar bills laid in a medical cross shape
Illustration: Annelise Capossela/Axios

Major Medicare plans are often inflating how sick their members are — and in at least one example, went so far as to add diagnoses doctors hadn't made — to bilk millions of dollars from the health care system, a whistleblower told Bloomberg.

  • In one case, a woman was even coded for prostate cancer, according to the report.

Why it matters: Medicare Advantage is fast growing in popularity — and in the amount of money it's costing the health care system as seniors flock to the plans.

Between the lines: Insurers say Medicare Advantage delivers better services, better access to care and better value than traditional Medicare.

  • But as Adriel recently reported, health insurers that sell private Medicare plans collected $12 billion more caring for seniors in 2020 than it would have cost in traditional Medicare.
  • A report from the Medicare Payment Advisory Commission attributed the difference to aggressive medical record coding.

Yes but: Private insurers who administer Medicare Advantage plans just got a bigger than expected pay bump from the Biden administration.

What's next: One of the nation's leading MA plans, Kaiser Permanente, is facing its own risk adjustment scandal.

  • The Department of Justice called addressing Medicare fraud an important priority, Bloomberg reported.
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