Medicare Advantage Has Multi-Billion Dollar Problem

For years, experts and reformists have scrutinized the way the federal government calculates benefits for the Medicare Advantage program — saying the formula inflates patients’ health risks and costs the government billions of unnecessary dollars each year. The Government Accountability Office estimated that improper payments from the program cost $12 billion in 2014 alone. Some experts suggest that much of those erroneous payments stemmed from billing errors related to the way the government determines how much to pay for each of the 16 million people enrolled in Medicare Advantage. Unlike traditional Medicare’s standard fee-for-service payment system, Medicare Advantage uses “risk scores” which measure how healthy or sick patients are. The rating determines how much money the government pays into the plan. The sicker the patient, the higher the score. The higher the score, the greater the cost.  Though it’s not certain, many have suggested that the formula allows for patients’ ratings to be inflated — so that the government ends up paying more money than it should — potentially billions more. A study commissioned by the federal government back in 2009 reached this conclusion. However, the study was mysteriously never published.  The under-wraps study was recently unearthed by the Center for Public Integrity through a Freedom of Information Act request.

Source/more: Fiscal Times