Sen. Chuck Grassley, R-Iowa, wants federal health officials to tighten scrutiny of private Medicare Advantage health plans amid ongoing concern that insurers overbill the government by billions of dollars every year.
Grassley, the influential chairman of the Senate Judiciary Committee, has asked Centers for Medicare and Medicaid Services (CMS) officials to explain why they failed to collect nearly $125 million in potential overcharges identified at five Medicare Advantage plans audited in a single year.
In an April 17 letter to CMS Administrator Seema Verma, Grassley cited an article on alleged overcharges published in January by Kaiser Health News and the Center for Public Integrity. The story said that Medicare had potentially overpaid five health plans $128 million in 2007, but under pressure from the insurance industry, collected just $3.4 million and settled the cases.
“The difference in the assessment and the actual recovery is striking and demands an explanation,” Grassley wrote.
CMS officials did not respond to requests for comment.
Medicare Advantage is a popular alternative to traditional Medicare. The privately run health plans have enrolled more than 18 million elderly and disabled people — about a third of those eligible for Medicare — at a cost to taxpayers approaching $200 billion a year. The plans also enjoy strong support in Congress.
Medicare is supposed to pay the health plans higher rates for sicker patients and less for people in good health using a formula called a risk score.
Yet CMS records reveal that billions of tax dollars are wasted annually partly because some health plans exaggerate how sick their patients are by inflating risk scores and boosting their payments improperly.
Grassley asked in his letter what steps CMS is taking “to ensure that insurance companies are not fraudulently altering risk scores” and how many audits are now being conducted.
“By all accounts, risk score gaming is not going to go away. Therefore, CMS must aggressively use the tools at its disposal to ensure that it is efficiently identifying fraud and subsequently implementing timely and fair remedies,” he wrote.
Grassley also noted that CMS needs to step up oversight audits because Medicare Advantage plans are expected to grow substantially in coming years.
“The use of these tools is all the more important as Medicare Advantage adds more patients and billions of dollars of taxpayer money is at stake,” Grassley’s letter said.