REPORT SAYS PROBE INDICATES HEALTH INSURERS MAY HAVE FLEECED TAXPAYERS OUT OF $70 BILLION
June 17, 2014
Graphic from "Medicare Advantage Money Grab" report by Center For Public Integrity. http://www.publicintegrity.org
(NATIONAL) -- A year-long investigation by the Center for Public Integrity has revealed that health insurers may have fleeced taxpayers out of $70 billion in just five years.
The report is posted on the Center's website by reporter Wendall Potter who says taxpayers should not assume their elected lawmakers in Washington will be outraged or even launching a federal probe about this.
"You would think members of Congress in both parties would be so outraged they’d be launching their own investigation and railing against the “fraud and abuse” they decry on the campaign trail.
But I’m not holding out much hope. That’s because I know just how powerful and influential the health insurance industry is and how its lobbyists almost always get what they want out of Congress and the White House, regardless of who is sitting in the Oval Office."
The Center’s investigation called the "Medicare Advantage Money Grab" found here discovered that:
~ Federal officials made nearly $70 billion in “improper” payments to Medicare Advantage plans from 2008 to 2013, mostly over-billings, by manipulating or misusing a Medicare payment tool called a “risk score.”
~ From 2007 through 2011, Medicare Advantage risk scores rose more than twice as fast as the average for people in standard Medicare in more than 500 counties nationwide.
~ Federal health officials have long kept key financial records of Medicare Advantage plans in a “black box,” inaccessible to the public and press.
~ Medicare Advantage health plans collect billions of dollars from controversial “house calls” that industry officials say help improve care but which critics argue inflate costs needlessly.
Reporter Potter says the findings didn't come as a shock to him because during his two decades in the industry, at both Humana and Cigna, "I came to understand just how much of a cash cow the Medicare Advantage program has become to insurers participating in the program. Wall Street financial analysts devote considerable attention to determining how much insurers’ Medicare Advantage business contributes to their bottom lines and how much of the money they take in from the government is actually paid out in medical claims. The less they spend on medical care, the better, from Wall Street’s perspective."
Potter adds this is a huge business and one that is growing rapidly and because the business is so profitable, insurers spend millions of dollars on lobbying, advertising, PR and “grassroots” political activities to keep the money flowing unimpeded.