Federal officers resolved greater than a decade in the past to crack down on whopping authorities overpayments to non-public Medicare Benefit medical insurance plans, which have been siphoning off billions of tax {dollars} yearly.
However Facilities for Medicare & Medicaid Providers officers have but to demand any refunds — and through the years the personal insurance coverage have morphed right into a politically potent juggernaut that has signed up greater than 33 million seniors and is aggressively lobbying to stave off cuts.
Critics have watched with alarm because the business has managed to deflate or deflect monetary penalties and steadily acquire clout in Washington via political contributions; tv promoting, together with a 2023 Tremendous Bowl characteristic; and different actions, together with mobilizing seniors. There’s additionally a revolving door, during which senior CMS personnel have cycled out of presidency to take jobs tied to the Medicare Benefit business after which returned to the company.
Sen. Chuck Grassley (R-Iowa) mentioned Medicare Benefit fraud “is losing taxpayer {dollars} to the tune of billions.”
“The query is, what’s CMS doing about it? The company should tighten up its controls and work with the Justice Division to prosecute and get better improper funds,” Grassley mentioned in an announcement to KFF Well being Information. “Clearly that’s not taking place, not less than to the extent it must be.”
David Lipschutz, an lawyer with the Heart for Medicare Advocacy, a nonprofit public curiosity legislation agency, mentioned policymakers have an unsettling historical past of yielding to business stress. “The well being plans throw a mood tantrum after which CMS will again off,” he mentioned.
Authorities spending on Medicare Benefit, which is dominated by massive medical insurance firms, is anticipated to hit $462 billion this yr.
New particulars of the federal government’s failure to rein in Medicare Benefit overcharges are rising from a Division of Justice civil fraud case filed in 2017 towards UnitedHealth Group, the insurer with probably the most Medicare Benefit enrollees. The case is pending in Los Angeles. The DOJ has accused the enormous insurer of dishonest Medicare out of greater than $2 billion by mining affected person data to search out extra diagnoses that added income whereas ignoring overcharges that may have decreased payments. The corporate denies the allegations and has filed a movement for abstract judgment.
Information from the courtroom case are surfacing because the Medicare Benefit business ramps up spending on lobbying and public relations campaigns to counter mounting criticism.
Whereas critics have argued for years that the well being plans value taxpayers an excessive amount of, the business additionally has come below hearth extra not too long ago for allegedly scrimping on important well being care, even dumping tons of of 1000’s of members whose well being plans proved unprofitable.
“We acknowledge it is a vital second for Medicare Benefit,” mentioned Rebecca Buck, senior vp of communications for the Higher Medicare Alliance, which kinds itself as “the main voice for Medicare Benefit.”
Buck mentioned initiatives aimed toward slashing authorities funds could immediate well being plans to chop important providers. “Seniors are saying loud and clear: They’ll’t afford insurance policies that may make their well being care costlier,” she mentioned. “We wish to be sure Washington will get the message.”
AHIP, a commerce group for well being insurers, additionally has launched a “seven-figure” marketing campaign to advertise its view that Medicare Benefit gives “higher care at a decrease value,” spokesperson Chris Bond mentioned.
Revolving Door
CMS, the Baltimore-based company that oversees Medicare, has lengthy felt the sting of business stress to sluggish or in any other case stymie audits and different steps to scale back and get better overpayments. These points typically entice little public discover, despite the fact that they will put billions of tax {dollars} in danger.
In August, KFF Well being Information reported how CMS officers backed off a 2014 plan to discourage the well being plans from overcharging amid an business “uproar.” The rule would have required that insurers, when combing sufferers’ medical data to establish underpayments, additionally search for overcharges. Well being plans have been paid billions of {dollars} via the info mining, often called “chart opinions,” in keeping with the federal government.
The CMS press workplace declined to answer written questions posed by KFF Well being Information. However in an announcement, it known as the company a “good steward of taxpayer {dollars}” and mentioned partially: “CMS will proceed to make sure that the MA program provides strong and steady choices for individuals with Medicare whereas strengthening cost accuracy in order that taxpayer {dollars} are appropriately spent.”
Court docket data from the UnitedHealth case present that CMS efforts to tighten oversight stalled amid years of technical protests from the business — equivalent to arguing that audits to uncover overpayments have been flawed and unfair.
In a single case, Jeffrey Grant, a CMS official who had decamped for a job supporting Medicare Benefit plans, protested the audit system to a number of of his former colleagues, in keeping with a deposition he gave in 2018.
Grant has since returned to CMS and now’s deputy director for operations on the company’s Heart for Shopper Data and Insurance coverage Oversight. He declined to remark.
Not less than a dozen witnesses within the UnitedHealth case and the same DOJ civil fraud case pending towards Anthem are former rating CMS officers who departed for jobs tied to the Medicare Benefit business.
Marilyn Tavenner is one. She led the company in 2014 when it backed off the overpayment regulation. She left in 2015 to go business commerce group AHIP, the place she made greater than $4.5 million throughout three years on the helm, in keeping with Inside Income Service filings. Tavenner, who’s a witness within the UnitedHealth case, had no remark.
And in October 2015, as CMS division chiefs have been batting round concepts to crack down on billing abuses, together with reinstating the 2014 regulation on information mining, the company was led by Andy Slavitt, a former govt vp of the Optum division of UnitedHealth Group. The DOJ fraud swimsuit focuses on Optum’s information mining program.
Within the authorized proceedings, Slavitt is recognized as a “key custodian relating to closing resolution making by CMS” on Medicare Benefit.
“I don’t have any consciousness of that dialog,” Slavitt informed KFF Well being Information in an electronic mail. Slavitt, who now helps run a well being care enterprise capital agency, mentioned that in his CMS tenure he “was recused from all issues associated to UHG.”
‘Improper’ Funds
CMS officers first laid plans to curb escalating overpayments to the insurers greater than a decade in the past, in keeping with paperwork filed in August within the UnitedHealth case.
In a January 2012 presentation, CMS officers estimated that they had made $12.4 billion price of “improper funds” to Medicare Benefit teams in 2009, principally as a result of the plans did not doc that sufferers had the situations the federal government paid them to deal with, in keeping with the courtroom paperwork.
As a treatment, CMS got here up with an audit program that chosen 30 plans yearly, taking a pattern of 201 sufferers from every. Medical coders checked to verify affected person information correctly documented well being situations for which the plans had billed.
The 2011 audits discovered that 5 main Medicare Benefit chains did not doc from 12.3% to 25.8% of diagnoses, mostly strokes, lung situations, and coronary heart illness.
UnitedHealth Group, which had the bottom charge of unconfirmed diagnoses, is the one firm named within the CMS paperwork within the case file. The identities of the 4 different chains are blacked out within the audit data, that are marked as “privileged and confidential.”
In a Could 2016 personal briefing, CMS indicated that the well being plans owed from $98 million to $163 million for 2011 relying on how the overpayment estimate was extrapolated, courtroom data present.
However CMS nonetheless hasn’t collected any cash. In a shock motion in late January 2023, CMS introduced that it might accept a fraction of the estimated overpayments and never impose main monetary penalties till 2018 audits, which have but to get underway. Precisely how a lot plans will find yourself paying again is unclear.
Richard Kronick, a former federal well being coverage researcher and a professor on the College of California-San Diego, mentioned CMS has largely did not rein in billions of {dollars} in Medicare Benefit overpayments.
“It’s affordable to assume that stress from the business is a part of the explanation that CMS has not acted extra aggressively,” Kronick mentioned.
CMS data present that officers thought-about strengthening the audits in 2015, together with by limiting well being plans from conducting “residence visits” to sufferers to seize new prognosis codes. That didn’t occur, for causes that aren’t clear from the filings.
In any case, audits for 2011 via 2015 “are usually not but closing and are topic to alter,” CMS official Steven Ferraina said in a July courtroom affidavit.
“It’s galling to me that they haven’t recovered greater than they’ve,” mentioned Edward Baker, a whistleblower lawyer who has studied the problem.
“The federal government must be extra aggressive in oversight and enforcement of the business,” he mentioned.
Senior CMS official Cheri Rice really helpful within the October 2015 electronic mail thread with key employees that CMS may commit extra sources to supporting whistleblowers who report overbilling and fraud.
“We expect the whistleblower exercise might be as efficient – or much more efficient – than CMS audits in getting plans to do extra to forestall and establish danger adjustment overpayments,” Rice wrote.
However the handful of instances that DOJ may realistically carry towards insurers can’t substitute for CMS fiscal oversight, Baker mentioned.
“Sadly, that makes it seem that fraud pays,” he mentioned.
Spending Surge
In December, a bipartisan group of 4 U.S. senators, together with Invoice Cassidy (R-La.), wrote to CMS to voice their alarm in regards to the overpayments and different issues. “It’s unclear why CMS hasn’t taken stronger motion towards overpayments, regardless of this being a longstanding difficulty,” Cassidy informed KFF Well being Information by electronic mail.
In January, Sen. Elizabeth Warren (D-Mass.) and Rep. Pramila Jayapal (D-Wash.) known as for CMS to crack down, together with by limiting use of chart opinions and residential visits, often called well being danger assessments, to extend plan revenues.
Cassidy, a doctor, mentioned that “upcoding and abuses of chart evaluation and well being danger assessments are well-known issues CMS may tackle instantly.”
Advocates for Medicare Benefit plans, whose greater than 33 million members comprise over half of individuals eligible for Medicare, fear that an excessive amount of concentrate on cost points may hurt seniors. Their analysis reveals most seniors are pleased with the care they obtain and that the plans sometimes value them much less out-of-pocket than conventional Medicare.
Buck, the spokesperson for the Higher Medicare Alliance, mentioned that because the annual open enrollment interval begins in mid-October, seniors may even see “fewer advantages and fewer plan decisions.”
The group has ramped up complete spending in recent times to maintain that from taking place, IRS filings present.
In 2022, the newest yr obtainable, the Higher Medicare Alliance reported bills of $23.1 million, together with greater than $14 million on promoting and promotion, whereas in 2023, it paid for a Tremendous Bowl advert that includes seniors in a bowling alley and left viewers with the message: Chopping Medicare Benefit was “nuts.”
Bruce Vladeck, who ran CMS’ predecessor company from 1993 via 1997, mentioned that when authorities officers first turned to Medicare managed care teams within the Nineties, they rapidly noticed well being plans enlist members to assist press their agenda.
“That’s totally different from most different well being care supplier teams that foyer,” Vladeck mentioned. “It’s a political weapon that Medicare Benefit plans haven’t been in any respect reluctant to make use of.”
The Higher Medicare Alliance reported lobbying on 18 payments this yr and final, in keeping with OpenSecrets. Some are particular to Medicare Benefit, equivalent to one requiring insurers to report extra detailed information about remedies and providers and one other to develop the advantages they will provide, whereas others extra broadly concern well being care prices and providers.
Proposed reforms apart, CMS seems to imagine that eliminating well being plans that allegedly rip off Medicare may go away susceptible seniors within the lurch.
Testifying on behalf of CMS in a Could 2023 deposition within the UnitedHealth Group swimsuit, former company official Anne Hornsby mentioned some seniors may not “discover new suppliers simply.” Noting UnitedHealth Group is the only largest Medicare Benefit contractor, she mentioned CMS “is serious about defending the continuity of care.”
