Grassley Demands Medicare Advantage Investigation

Senator Charles Grassley is turning his investigative attention to alleged fraud in the Medicare Advantage (MA) program. The program is a kind of private Medicare for about 16 million elderly beneficiaries paid for by Medicare and run by private insurers.

Grassley, a co-father of the Sunshine Act, recently sent letters to CMS (Centers for Medicare and Medicaid Services) and DOJ (Department of Justice) regarding allegations of “Risk Score” fraud by the private MA insurers. Another Senator, Claire McCaskill, sent a similar letter to CMS asking what steps the agency was taking to address alleged Medicare Advantage fraud and abuse.

“Risk Score” is a formula based on a beneficiary’s health that lets CMS figure out what fee to pay private insurers each month per beneficiary. The higher the risk, the higher the payments. There have been recent allegations in False Claims whistleblower lawsuits that insurers like Aetna, Cigna, UnitedHealthCare and others have been fraudulently inflating risk scores.

$70 Billion Improper Payment Estimate

Here’s an example provided by our colleagues at Policy and Medicine. If a physician documents that a patient is drug or alcohol dependent, the government pays the plan $2, 400 extra for the added risk and associated anticipated expense. A recent article from The Center for Public Integrity said that when a home visit “unearths a medical condition, as it often does, health plans may be able to raise a person’s risk score and collect thousands of dollars in added Medicare revenue over a year—even if they don’t incur any added expenses caring for that person.” The Government Accounting Office has estimated that Medicare made $12 billion in improper payments to private insurers in 2014 for the MA program and nearly $70 billion from 2008 through 2013, based on inflated risk scores.

Fed Cover Up?

But, allegedly, the government already knew this.

Back in March 2015, the Financial Times reported that a study commissioned by the federal government in 2009 concluded that MA programs were overcharging. “However, ” stated the report, “the study was mysteriously never published, ” until it was unearthed by the Center for Public Integrity through a Freedom of Information Act request.

McCaskill, a Democrat, wrote that, “With fraudulently inflated risk scores potentially costing taxpayers billions of dollars every year and resulting in less money in the Medicare Trust Funds for our seniors, this is an issue that must be investigated further.” Grassley, a Republican, wants to know what approach DOJ and CMS are using to fight Medicare Advantage fraud. The DOJ is reportedly investigation the whistleblower’s false claims charges.

“With the reported increase in risk score gaming, and the monumental cost that the taxpayer will shoulder for such wrongdoing, it is imperative that CMS implement safeguards to reduce risk score fraud, waste and abuse. Moreover, if the reports of abuse are true, CMS should increase its auditing practices, ” Grassley wrote.

Neither CMS nor the Justice Department has commented on the letters.