Major US insurance companies stole billions from taxpayers in overbilling scam
Numerous major U.S. health insurance companies have made as much as $25 billion in profits by fraudulently billing the U.S. government for nonexistent healthcare charges, according to a New York Times report.
By 2023, nearly half of the estimated 64 million people on Medicare — the government’s national health insurance program for people over 65 and young people with disabilities — will have a Medicare Advantage (MA) plan. The MA plans, managed by private insurance companies, receive payments from the U.S. government for managing people’s care.
Whistleblowers, federal officials, and an inspector general accused some of the biggest insurers of fraudulently overbilling the government by falsely reporting patient ailments. The accused companies include UnitedHealth, Humana, CVS Health, Kaiser Permanente, Cigna, and others. Most of the programs’ large insurers have also been accused of fraud in court.
Two decades ago, congressional Republicans created MA “to encourage health insurers to find innovative ways to provide better care at lower cost,” the Times wrote. However, the MA program now costs more money per patient than those enrolled in Medicare.
Journalist Natalie Shure explained how the scam works.
“Privatized Medicare plans cherry-pick healthier enrollees, fudge medical records to make them look as sick as possible, coax doctors into tacking on extra sham diagnoses to bill for, and pay themselves a profit on top of it,” she wrote, noting that the insurance companies often refuse to provide additional treatment to these allegedly sick patients. “Medicare Advantage shouldn’t exist.”
\u201cPrivatized Medicare plans cherry pick healthier enrollees, fudge medical records to make them look as sick as possible, coax docs into tacking on extra sham diagnoses to bill for and pay themselves a profit on top of it. Medicare Advantage shouldn't exist\n\nhttps://t.co/HpLFgw0fOV\u201d— Natalie Shure (@Natalie Shure) 1665239132
As the Times reported, “The government now spends nearly as much on Medicare Advantage’s 29 million beneficiaries as on the Army and Navy combined.” The private insurers have pocketed anywhere from $12 billion to $25 billion through fraudulent claims in 2020, the Times reported.
Even though officials at the Centers for Medicare and Medicaid Services (CMS) have been given congressional permission to “reduce the insurers’ rates in response to evidence of systematic overbilling,” the Times added, “CMS has never chosen to do so.”
Nearly 80 percent of U.S. House members recently signed onto a letter “to protect the [MA] program from policies that would undermine” its stability, Common Dreams reported. Many of these politicians receive donations from insurance companies.
In April, the Biden administration announced that, next year, MA insurers will receive one of the largest payment increases in the program’s history, the publication added.
Progressive politicians, activists, and healthcare advocates have argued that MA is merely part of an effort to privatize Medicare entirely, a move that would potentially allow private insurance companies to fleece U.S. taxpayers for additional billions.