Medicare: Enrollment Period Nears End Amid Concerns About Medicare Advantage Overcharges — Should You Steer Clear?

Senior female customer standing at chemist counter as pharmacist hands her medication order.
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Many seniors are scrambling to decide on the right Medicare plan ahead of the open enrollment deadline of Dec. 7, which means they are also weighing the pros and cons of Medicare Advantage. But some senior advocates say people should be wary of how certain Medicare Advantage plans bill customers and the federal government.

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Recently released federal audits found widespread overcharges and other payment errors involving MA plans, Kaiser Health News reported. Some plans have overbilled the U.S. government by an average of more than $1,000 per patient a year.

The 90 audits examined billings from 2011 through 2013 — the most recent completed — and uncovered roughly $12 million in net overpayments for the care of 18,090 patients sampled. However, the actual losses to taxpayers are probably much higher.

As GOBankingRates has previously reported, Medicare Advantage, also known as Part C, is a private insurance alternative to original Medicare that bundles together Parts A and B and, in most cases, the Part D drug plan.

Although the federal audits date back a decade, some experts say it’s likely that overcharging has continued in the years since, Business Insider reported. This is based on newer research conducted by MedPAC, a nonpartisan and independent legislative-branch agency that gives Congress policy advice on the Medicare program.

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“There hasn’t been enough of an indictment of Medicare Advantage plans,” Mary Johnson, a Social Security and Medicare policy analyst at the Senior Citizens League, told Business Insider. “There have been clear cases of overpayments and improper billing of U.S. taxpayers.”

Reports of overcharges and other errors come during a period of rapid growth in MA plans. Enrollment grew by about 2.2 million beneficiaries between 2021 and 2022, Business Insider noted, citing data from the Kaiser Family Foundation. The Congressional Budget Office projects that the share of all Medicare beneficiaries enrolled in MA plans will surge to 61% in another decade. 

MA plans typically offer more preventive-care options than original Medicare, but they also offer less flexibility in terms of healthcare providers — and they often cost more.

“These plans can and often do lead to high out-of-pocket spending, especially later in life, when older beneficiaries can least afford the costs,” Johnson said.

In addition, she said, MA plans “have an incentive to find ways to inflate risk scores [of patients] in order to get higher payments from the government. The sicker the patient, the more they are worth … Congress may need to pass legislation that establishes how the adjustments to reimbursements will work, rather than relying on trying to claw them back.” 

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Even some government officials say the Centers for Medicare & Medicaid Services can do more to monitor MA plans. Ted Doolittle, a former deputy director of CMS’ Center for Program Integrity, told Kaiser Health News that the CMS has failed to hold Medicare Advantage plans accountable.

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“I think CMS fell down on the job on this,” said Doolittle, who currently serves as healthcare advocate for the state of Connecticut.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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