NB: The issues below are due to both the monetized and for-profit
aspects of USA health care. Health care, as with education, should be a
best results field, not one with productivity and cost-benefit-analysis
metrics that typically are monetized. (In education, the productivity
measures include retention, graduation, standardized test scores, and in
the case of much of higher education, students-as-customers satisfaction.)
https://www.yahoo.com/news/cash-monster-insatiable-insurers-exploited-162553795.html
The New York Times
'The Cash Monster Was Insatiable': How Insurers Exploited Medicare for
Billions
Reed Abelson and Margot Sanger-Katz
Sat, October 8, 2022 at 9:25 AM
Dr. James Taylor, one of 10 whistle-blowers who have accused Kaiser
Permanente of fraud, at his home in Bromfield, Colo. on May 20, 2022.
(Rachel Woolf/The New York Times)
The health system Kaiser Permanente called doctors in during lunch and
after work and urged them to add additional illnesses to the medical
records of patients they hadn’t seen in weeks. Doctors who found enough
new diagnoses could earn bottles of Champagne or a bonus in their paycheck.
Anthem, a large insurer now called Elevance Health, paid more to doctors
who said their patients were sicker. And executives at UnitedHealth
Group, the country’s largest insurer, told their workers to mine old
medical records for more illnesses — and when they couldn’t find enough,
sent them back to try again.
Each of the strategies — which were described by the Justice Department
in lawsuits against the companies — led to diagnoses of serious diseases
that might have never existed. But the diagnoses had a lucrative side
effect: They let the insurers collect more money from the federal
government’s Medicare Advantage program.
Medicare Advantage, a private-sector alternative to traditional
Medicare, was designed by Congress two decades ago to encourage health
insurers to find innovative ways to provide better care at lower cost.
If trends hold, by next year, more than half of Medicare recipients will
be in a private plan.
But a New York Times review of dozens of fraud lawsuits, inspector
general audits and investigations by watchdogs shows how major health
insurers exploited the program to inflate their profits by billions of
dollars.
The government pays Medicare Advantage insurers a set amount for each
person who enrolls, with higher rates for sicker patients. And the
insurers, among the largest and most prosperous American companies, have
developed elaborate systems to make their patients appear as sick as
possible, often without providing additional treatment, according to the
lawsuits.
As a result, a program devised to help lower health care spending has
instead become substantially more costly than the traditional government
program it was meant to improve.
Eight of the 10 biggest Medicare Advantage insurers — representing more
than two-thirds of the market — have submitted inflated bills, according
to the federal audits. And four of the five largest players —
UnitedHealth, Humana, Elevance and Kaiser — have faced federal lawsuits
alleging that efforts to overdiagnose their customers crossed the line
into fraud.
The fifth company, CVS Health, which owns Aetna, told investors its
practices were being investigated by the Department of Justice.
In statements, most of the insurers disputed the allegations in the
lawsuits and said the federal audits were flawed. They said their aim in
documenting more conditions was to improve care by accurately describing
their patients’ health.
Many of the accusations reflect missing documentation rather than any
willful attempt to inflate diagnoses, said Mark Hamelburg, an executive
at AHIP, an industry trade group. “Professionals can look at the same
medical record in different ways,” he said.
The increased privatization has come as Medicare’s finances have been
strained by the aging of baby boomers. But for insurers that already
dominate health care for workers, the program is strikingly lucrative: A
study from the Kaiser Family Foundation, a research group unaffiliated
with the insurer Kaiser, found the companies typically earn twice as
much gross profit from their Medicare Advantage plans as from other
types of insurance.
For people choosing between traditional Medicare and Medicare Advantage,
there are trade-offs. Medicare Advantage plans can limit patients’
choice of doctors, and sometimes require jumping through more hoops
before getting certain types of expensive care.
But they often have lower premiums or perks such as dental benefits —
extras that draw beneficiaries to the programs. The more the plans are
overpaid by Medicare, the more generous to customers they can afford to be.
“Medicare Advantage is an important option for America’s seniors, but as
Medicare Advantage adds more patients and spends billions of dollars of
taxpayer money, aggressive oversight is needed,” said Sen. Charles
Grassley, R-Iowa, who has investigated the industry. The efforts to make
patients look sicker and other abuses of the program have “resulted in
billions of dollars in improper payments,” he said.
Many of the fraud lawsuits were initially brought by former employees
under a federal whistleblower law that allows them to get a percentage
of any money repaid to the government if their suits prevail. But most
have been joined by the Justice Department, a step the government takes
only if it believes the fraud allegations have merit. Last year, the
department’s civil division listed Medicare Advantage as one of its top
areas of fraud recovery.
In contrast, regulators overseeing the plans at the Centers for Medicare
and Medicaid Services, or CMS, have been less aggressive, even as the
overpayments have been described in inspector general investigations,
academic research, Government Accountability Office studies, MedPAC
reports and numerous news articles, over the course of four presidential
administrations.
Congress gave the agency the power to reduce the insurers’ rates in
response to evidence of systematic overbilling, but CMS has never chosen
to do so. A regulation proposed in the Trump administration to force the
plans to refund the government for more of the incorrect payments has
not been finalized four years later. Several top officials have swapped
jobs between the industry and the agency.
CMS officials declined interview requests. In a statement, the CMS
administrator, Chiquita Brooks-LaSure, said the agency recently sought
feedback on how to improve the program.
Some critics say the lack of oversight has encouraged the industry to
compete over who can most effectively game the system rather than who
can provide the best care.
“Even when they’re playing the game legally, we are lining the pockets
of very wealthy corporations that are not improving patient care,” said
Dr. Donald Berwick, a CMS administrator under the Obama administration,
who recently published a series of blog posts on the industry. “When you
skate to the edge of the ice, sometimes you’re going to fall in.”
The program’s promise
Congress’ first attempt to design a privatized Medicare plan paid
insurers the same amount for every patient with similar demographic
characteristics.
In theory, if the insurers could do better than traditional Medicare —
by better managing patients’ care, or otherwise improving their health —
their patients would cost less and the insurers would make more money.
But some insurers engaged in strategies — such as locating their
enrollment offices upstairs or offering gym memberships — to entice only
the healthiest seniors, who would require less care, to join. To deter
such tactics, Congress decided to pay more for sicker patients.
Almost immediately, companies saw ways to exploit that system. The
traditional Medicare program provided no financial incentive to doctors
to document every diagnosis, so many records were incomplete. Under the
new program, insurers began rigorously documenting all of a patient’s
health conditions — say, depression or a long-ago stroke — even when
they had nothing to do with the patient’s current medical care.
Kaiser, which both runs a health plan and provides medical care, is
often seen as a model system. But its control over providers gave it
additional leverage to demand additional diagnoses from the doctors
themselves, according to the lawsuit.
“The cash monster was insatiable,” said Dr. James Taylor, a former
coding expert at Kaiser who is one of 10 whistleblowers to accuse the
organization of fraud.
At meetings with supervisors, he was instructed to find additional
conditions worth tens of millions of dollars. “It was an actual agenda
item and how could we get this,” Taylor said.
Inaction at Medicare
Even before the first lawsuits were filed, regulators and government
watchdogs could see the number of profitable diagnoses escalating. But
Medicare has done little to tamp down overcharging.
Several experts, including Medicare’s advisory commission, have
recommended reducing all the plans’ payments. Congress has ordered
several rounds of cuts and gave CMS the power to make additional
reductions if the plans continued to overbill. The agency has not
exercised that power.
The agency does periodically audit insurers by looking at a few hundred
of their customers’ cases. But insurers are fined for billing mistakes
found only in those specific patients. A rule proposed during the Trump
administration to extrapolate the fines to the rest of the plan’s
customers has not been finalized.
Few analysts expect major legislative or regulatory changes to the program.
“Medicare Advantage overpayments are a political third rail,” said Dr.
Richard Gilfillan, a former hospital and insurance executive and a
former top regulator at Medicare, in an email. “The big health care
plans know it’s wrong, and they know how to fix it, but they’re making
too much money to stop. Their CEOs should come to the table with
Medicare as they did for the Affordable Care Act, end the coding frenzy,
and let providers focus on better care, not more dollars for plans.”