Audit report shows million in Medicare overcharges

The audit report shows million in Medicare overcharges federal audit reports disclosed recently show excessive charges in terms of pending payments charged to Medicare Advantage health plans for senior citizens. These included plans overcharged to the government by over $1,000 per patient annually.

The government’s audits revealed around $12 million in net overpayments for the care of over 18,000 patients who were sampled, however, the actual costs to taxpayers are likely substantially more significant. Medicare Advantage is considered an expanding alternative to traditional Medicare, which is mostly managed by large insurance firms.

CMS officials have stated that they will cover the payment rate mistakes for the entire membership. They anticipate collecting over $650 million in compensation. CMS had scheduled to implement the mentioned rule in November but delayed it until February of next year.

According to CMS, most of the audited plans were of high sensitivity. They were among the most active in pursuing additional compensation for patients they said were sicker than others. The government pays healthcare providers using a mechanism known as a “risk score,” which is expected to result in higher charges for sicker patients and lower prices for healthy ones.

Over the past ten years, CMS has completed 90 audits, During that time, enrollment in Medicare plans increased nearly four times to twenty-eight million dollars as of 2022, increasing the cost to the government to over $420 billion.

According to government statistics, audits have shown overpayments of $1,000 per patient. Additionally, Humana, one of the top Medicare Advantage sponsors, had overpayments above the $1,000 average in 10 audits.

Auditors characterize overpayments as when patient records do not justify the payment made by the government for their health condition, or when doctors are unable to identify the intensity of sickness. Over the three years, this occurred for little over 20% of the medical disorders evaluated; rates of unconfirmed illnesses were greater in other plans.

Three groups, including KHN, have filed a lawsuit against CMS to get information regarding the overpayment audits, known as Risk Adjustment Data Validation.

As per legal reports, CMS had charged a legal firm a search cost worth $120,000, leading to giving nothing in return. The law firm filed a suit in federal court in Washington, D.C. last year, and the case is still pending.

 In September 2019, KHN filed a lawsuit against CMS after the agency failed to reply to the audit request. CMS agreed to turn up the audit summaries and other records in exchange for $63,000 in legal costs to Davis Wright Tremaine, the law firm that represented KHN. CMS has made no admission of wrongdoing in withholding the documents.

Mary Beth, President of Medicare Alliance stated:

“While this data is more than a decade old, more current research shows Medicare Advantage’s affordability and good management of Medicare resources, the sector provides superior service and outcomes for patients.