Medicare Advantage fraud is staring Musk in the face — but critics predict he'll ignore it

06 February

Nov 16, 2024; New York, NY, USA; President-elect Donald Trump talks with Elon Musk (right) during UFC 309 at Madison Square Garden. Mandatory

Privatized Medicare Advantage plans overbill the U.S. federal government by up to $140 billion per year as they make patients appear sicker than they actually are to rake in more taxpayer money.

It didn't take a team of inexperienced engineers combing through the complex and sensitive inner workings of government payment systems to reach that conclusion, but that's reportedly what Elon Musk's lieutenants are now doing at the Centers for Medicare and Medicaid Services (CMS) with the stated goal of locating and combatting "fraud."

On Wednesday, The Wall Street Journal reported that representatives of the so-called "Department of Government Efficiency" (DOGE) have gained "access to key payment and contracting systems" at CMS with an eye toward "pinpointing what they consider fraud or waste."

Precisely what Musk and his lackeys see as fraud, and whether pervasive Medicare Advantage overbilling fits their definition, is unclear. In a post to his social media platform on Wednesday, Musk claimed—without elaborating or providing any evidence—that CMS is "where the big money fraud is happening."

But critics expressed doubt that Medicare Advantage, a huge cash cow for private insurers that's supported by President Donald Trump and congressional Republicans, will become a focal point of Musk's austerity blitz.

"You don't have to search payment systems for Medicare fraud, you could turn to the latest published report from the Medicare Payment Advisory Commission which helpfully lists $83 billion in annual fraud payments," The American Prospect's David Dayen wrote Wednesday. "The unnecessary overpayments are all made to private insurers in Medicare Advantage, the privatization of Medicare. We found the money!"

"Alternatively, if you're hunting for Medicare fraud you could go to the office of Senator Rick Scott," Dayen added, referring to the Florida Republican whose healthcare firm committed large-scale Medicare and Medicaid fraud.

Last month, Dayen noted that a crackdown on Medicare Advantage is "an unlikely avenue for DOGE" given that Mehmet Oz—who campaigned for the U.S. Senate on a plan dubbed "Medicare Advantage for All"—is poised to lead CMS.

Nor has Robert F. Kennedy Jr., who is on track for Senate confirmation to lead the department that oversees CMS, expressed any interest in tackling Medicare Advantage fraud. During his confirmation hearing last week, Kennedy failed to correctly answer basic questions about Medicare, including Medicare Part C—also known as Medicare Advantage.

Dean Baker, a senior economist at the Center for Economic and Policy Research, quipped Thursday that "I'll bet Elon and the DOGE boys can't find Medicare Advantage."

"You know these people were not hired on merit," he added.

In a blog post on Wednesday, Baker pushed back on the view that "Musk and his crew somehow want a world without government," writing that in reality they simply "don't want government social programs that help people who are not rich."

"Musk's view is that the government should only be there to make him and his fellow billionaires richer," Baker wrote. "We could have a much more efficient insurance system if we had Medicare for All, but that would wipe out the private insurance industry. Instead, we are going the other way and whittling down traditional Medicare and increasing costs by pushing people back to private insurers with Medicare Advantage."

"It is absurd that people on the left have allowed the Musk billionaire libertarians of the world to pretend they are anti-government," Baker added. "They just want a government that only serves their interest rather than society as a whole."

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