Health Insurance

Audits found 'widespread' bill errors in Medicare Advantage

Somebody get these check-writers a doctor.

The federal government often paid the wrong amount of money for patients covered by popular Medicare Advantage health plans, with most of those errors leading to overpayments, according to a series of audits disclosed Friday.

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The error rate for payments of more than 1,000 patients in Medicare Advantage plans was reportedly nearly two out of every three, leading to $3.3 million in incorrect payouts, the audits found.

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The five audits also found that 80 percent of important "risk scores" for patients—which determines how much the government pays Medicare Advantage plans for their customers—were too high, the Center for Public Integrity reported in a story published Friday. The Center for Public Integrity is a non-partisan, non-profit investigative news organization.

CPI's story also said that "auditors could not confirm one-third of the 3,950 medical conditions that health plans reported, mostly because records lacked sufficient documentation of a diagnosis."

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CPI said the overpayments totaled thousands of dollars a year for some patients.

All of the audits looked at payments the government made in 2007 to Medicare Advantage plans run by Aetna Health in New Jersey, Independence Blue Cross in metropolitan Philadelphia, Lovelace Health Plan in Albuquerque, Humana's Care Plus Plan in south Florida and UnitedHealth Group's PacificCare in Washington state.

Medicare Advantage plans now cover almost 17 million people, or one-third of all Medicare-eligible people at an annual cost of nearly $146 billion. In the program, which is also known as Medicare Part C, people are enrolled in health plans run by private insurers, but the Medicare system's trust funds pays the plans a fixed amount each month for the customers.

CPI had previously reported on PacificCare's audit. But the new story comes after CPI obtained a court order mandating disclosure of the other four audits as part of a Freedom of Information lawsuit filed by the group.

None of the health plans contacted by CPI commented on the audits findings.

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The federal Centers for Medicare and Medicaid Services, in response to CPI's story, said, "Reducing improper payments in Medicare Advantage is a top priority for CMS," and also noted that $3.4 million had been recovered by the agency from the five plans mentioned in the report as a result of the audits.

"Since we began measuring and reporting an improper payment rate for Part C, the improper payment rate due to over- and underpayments from inaccurate diagnosis data submitted by Medicare Advantage organizations has declined from approximately 15 percent in [fiscal year] 2009 to approximately 9 percent in FY 2014, 6 percent if you exclude underpayments," a CMS spokesman said.

"While this trend is in the right direction, it is critical that we continue to build on this success."

The agency also noted that plans are subjected to liability under the federal False Claims Act if they do not report and repay overpayments they identify, and that Medicare Advantage plans have returned about $1.5 billion in overpayments for the years 2006 through 2013.

Read the full CPI story here.