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Medicare Advantage plans have received almost $50 billion from 2018 to 2021. The money was for questionable diagnoses. They did this by claiming payments for diseases. The diseases had been neglected by doctors and never treated. It is a scandal and has raised various concerns. It’s about the honesty of the healthcare system and the oversight of Medicare funds.
The journal’s investigation has revealed differences in how often certain diagnoses occur. These differences are between Medical Advantage and Traditional Medicare. Medicare Advantage plans receive funds and payments based on the diagnoses they report. They get them from the financial side. CMS reimburses Medicare Advantage plans for conditions like diabetic cataracts. However, it does not reimburse for non-diabetic cataracts. These are also common among older adults.
They employed advanced methods to inflate diagnoses. They exaggerated patients’ conditions to get higher reimbursements. This practice is driven by the financial incentives in Medicare Advantage. Plans get funds based on the diagnoses they report.
For example, when CMS reimburses Medicare Advantage plans for diabetic cataracts, they completely neglect the reimbursement for non-diabetic cataracts, which is very common amongst older adults. This gap creates a financial motive for insurers. They manipulate diagnosis data to get more money.
In some cases, they even claimed payments for entirely fabricated diseases. This incident harms Medicare Advantage’s finances. It also deeply affects patients’ health. Medicare Advantage plans fill diagnoses to get more money. They do this regardless of patients’ actual health.
How were these diagnoses made?
- Costs have increased. Instead of saving Americans money, Medicare Advantage has added billions of dollars.
- Insurer-Added Diagnoses: Medicare permits insurers to add their diagnoses. They add them to the ones from patients’ doctors.
- Questionable Diagnoses: Many added diagnoses had no corresponding treatment or contradicted doctors’ opinions. Examples include:
- Diabetic cataracts
- HIV
Analysis Findings
- Doctors and Patient Awareness: Some diagnoses were made without doctors’ or patients’ knowledge. This is not fair to either side. Patients should be well-educated by authorities before they go through any diagnosis. A doctor or provider should know the patient’s history and the cause of this process before doing it.
- Financial Incentives: Insurers provide gift cards for home visits and pay doctors to review charts. Financial incentives work here on both ends, ultimately creating a win-win situation.
Cigna Group paid $172 million to settle a lawsuit. The suit overused in-home health risk assessments and chart reviews to increase payments.
Some case studies to know about
Diabetic Cataracts:
For the record, almost 66,000 Medicare Advantage patients were diagnosed post-cataract surgery. It is one of the impossible things that cataracts return post-surgery. Dr. Hogan Knox is a well-known eye specialist. He confirmed that once the cataract is removed, it won’t return to patients. But it still did in a few patients.
When patients with diabetes get cataracts, They do not get all the needed diabetes care. It was done casually and harmed patients’ health. It is a serious issue that needs to be taken care of.
HIV Diagnoses:
Almost 18,000 Medicare Advantage patients were diagnosed with HIV. But, their doctors did not give them proper treatment. It became a very concerning case. To the record, HIV-diagnosed patients almost generated about $3,000 a year in payments to insurers.
For patients, the implications are equally troubling. Insurers claim payments for treatments that were never provided. This can lead to incorrect medical records. It can affect future healthcare decisions. This can lead to more scrutiny or the denial of needed services. Their records show a history of over-diagnosed conditions.
Also, Medicare Advantage has limited networks of doctors and hospitals. It usually requires approval to see specialists. In one of KFF’s surveys, about a quarter of people on Medicare Advantage said it was hard to know what their insurance would cover and wouldn’t cover.
What do insurers have to say about the overall analysis?
Insurers criticize the analysis as one of the inaccurate and flawed treatment sectors. The Journal’s study showed that United Health received almost $8.7 billion in payments in 2021. The payments were for diagnoses that insurers drove. No doctor was found to be treating such diseases.
Spokesman Matthew Wiggin has said that the treatment analysis is inaccurate and biased. It asserts the Medicare advantage. It provides better health outcomes and more affordable healthcare for millions of seniors. He said the extra payments helped cover medical costs. They also reduced premiums and provided benefits for Medicare Advantage members.
Wiggin also criticized the analysis. It tied insurer diagnoses to later care. But he argued the COVID-19 pandemic disrupted care. It also lowered treatment rates during the period analyzed by the journal.
A spokesperson from major insurer Humana also called the Journal’s analysis “flawed and misleading.” They cited internal data. Home visits led to more HIV patients getting diagnosed and treated than reported.
The Journal consulted over a dozen experts about its analysis of Medicare data, who concluded that the methodology was sound. The data was reviewed under a research agreement with the federal government.
How are Medicare administrators making changes?
Medicare administrators are changing the list of diseases that grant insurers higher payments. Experts and studies have found high rates of insurer-driven diagnoses in Medicare Advantage. This has prompted these adjustments.
Starting in 2026, if you get a diagnosis like diabetic cataracts, it will cut extra payments to insurers. However, some diseases, like asthma, will be added to the list, granting higher payments.
John Gorman is a former Medicare official. He is also the founder of two companies that review records and do home visits for Medicare insurers. He doubts these changes will solve the problem. “Any time you base a system on diagnosis codes, there will be rampant abuse,” he told the Journal. “Insurers will find something else to make up the revenue.”
Dementia diagnoses rose by 7.8% in 2019, a study by the University of Southern California found. The diagnoses were among Medicare Advantage members. This coincided with the year that dementia was added to the list of diseases.
Conclusion
The Medicare Advantage system showed massive deceit. It highlighted big problems in overseeing and holding Medicare funds accountable. Insurers stole $50 billion through fraudulent claims. This hurts Medicare Advantage’s finances and patients’ health.
To prevent such fraud in the future, we need to use advanced data analytics and a clear structure. This will make the process and system easy and reliable for patients. By facing these challenges, the healthcare system can protect Medicare funds. It can also improve care for millions of seniors and disabled people.
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