Medicare Advantage and Taxpayer Costs
In this Blog we identify what Medicare Advantage is, its trends, fraud updates, and how regional evaluation of Advantage Plans is the most likely strategy for successful cost reduction.
What is a Medicare Advantage Plan?
A medicare advantage plan is a type of medicare plan that offers extra benefits beyond traditional medicare. These plans are offered through medicare advantage organizations, which are private companies that contract with the government to provide Medicare coverage. medicare advantage plans can include prescription drug coverage, vision care, and dental care. They may also offer more comprehensive coverage than traditional medicare.
2020-2021 Medicare Enrollment Statistics
The number of Medicare Advantage (MA) plans available continues to grow. The number of plans increased by 13% (402 plans) compared to 2020. Florida has the most available Medicare advantage plans (527), followed by California (424), Texas (289), New York (276), Pennsylvania (246), Ohio (202), Michigan (169), Washington (157), Georgia (149) and Illinois (147). Medicare Advantage (MA) is projected to grow by 2 million members this year reaching 26.5 million beneficiaries. The top-25 Medicare Advantage insurers enroll a combined 21.6 million lives, or 87 percent of the national market. Nine of these plans saw growth over 10% this past year. (link)
What is Medicare Advantage Fraud?
Medicare Advantage Fraud is the act of knowingly and willfully submitting or causing to be submitted false information with respect to a claim for payment under a medicare advantage plan, or with respect to enrollment in a medicare advantage plan. The schemes perpetrated by insurers and providers have bilked taxpayers and consumers out of billions of dollars, and the perpetrators have largely gone unpunished. One of the most egregious examples of health insurance fraud is the debacle involving Anthem and Medicare Advantage.
| Top 10 Medicare Advantage Providers | % of Medicare Advantage Market | Accused of Fraud by Whistleblower | Accused of Fraud by US Government | Overbilled according to OIG |
|---|---|---|---|---|
| UnitedHealth Group | 27% | Yes | Yes | Yes |
| Humana | 17% | Yes | Yes | |
| CVS Health | 10% | Yes | ||
| Elevance Health | 7% | Yes | Yes | |
| Kaiser Permanente | 6% | Yes | Yes | |
| Centene | 5% | |||
| Blue Cross Blue Shield of Michigan | 2% | Yes | ||
| Cigna | 25 | Yes | Yes | Yes |
| Highmark | 1% | Yes | ||
| Scan Group | 1% | Yes | Yes | Yes |
Settlement vs Verdict
A settlement is an agreement between the plaintiff and the defendant in a civil case that resolves the dispute without going to trial. The parties negotiate a settlement amount and then present it to the court for approval. If the court approves, the parties will sign a settlement agreement and the case will be dismissed.
A verdict is reached by a jury or judge after a trial has taken place. The jury or judge will decide who wins the case and what the damages awarded will be, and in legal cases; if the defendant found guilty will serve prison time and/or with fine amounts. (link)
Taxpayers are Losing Billions due to Medicare Fraud: Stats
The federal audits released recently reveal widespread overcharges and other errors in payments to Medicare Advantage health plans. Some plans were found to be overbilling the government more than $1,000 per patient a year on average. The government intends to recoup an estimated $650 million from insurers as a result, but this has yet to happen after nearly a decade. (link) The OIG has reported that it believes it will recover $787 million from audits and $3 Billion from investigative work due to its 2021 audits and investigation. (link). However, it remains to be seen how those losses shall redistributed to the beneficiaries. Just recouping overpayments and fraud is great, but how will these funds find their way back into your pockets as a taxpayer and/or beneficiary?
How to Optimize Medicare Advantage Oversight
Medicare Advantage Plans are overseen by private insurance but they are under the jurisdiction and oversight of the Federal Government and its Healthcare Agencies; CMS, HHS, and more sub-agencies. You as a taxpayer pay into their salaries and thus you are their “landlord” for their position. The key is to look at Medicare Advantage Plans from a regional perspective. Hospitals, Providers, and Patients must band together to look at the practices, premiums, coverage, and then lobby to their state legislatures against these abuses, waste, and over-billing which hurt local budgets and more importantly patients.
WHY WILL THIS APPROACH BE MORE EFFECTIVE?
Anthem, Aetna, and UnitedHealth have all been indicted by the US Government on a national scale and yet the fines are paid and business goes on. However, the regional plans are the ones that if managed improperly can rooted out and their privileges of administering Medicare Advantage Plans revoked. It’s a strategy of not fighting Goliath, when you fight the battle against each regional offender one at a time.
SUMMARY:
PCG Software is committed to supplying not just statistics but possible solutions to curb the rising price of healthcare without affecting patient outcomes. The fastest way to do this is to hold Insurers responsible for administering ethical and legal healthcare options and pricing to providers, hospitals, and beneficiaries. As a taxpayer you have a responsibility not just to complain about rising healthcare prices but to do something about it. Contact your local advocacy groups and political representative and document everything they say in response. Without the general public getting involved prices, fraud, waste, and abuse will continue to get worse.
