Medicare Advantage is expected to account for more than half of Medicare enrollees in this open enrollment season, despite greater scrutiny over fraud allegations and criticism of MA’s benefits.
Not only are MA plans expected to take a majority of enrollees, two companies will be responsible for nearly half of those enrollments: UnitedHealth Group and Humana.
Medicare covers Part A for inpatient hospital care and skilled nursing services and Part B for doctor visits, outpatient services and preventive care, all considered “Original Medicare.” Enrollees can add Part D for prescription benefits. They can also add Medicare supplement, or Medigap, to cover out-of-pocket costs, such as the 20% coinsurance in Medicare.
Medicare Advantage, or Part C, covers Parts A and B and usually Part D through private insurers. MA can also include dental, vision, hearing and fitness benefits. They can offer special needs plans, for example, geared for patients who suffer from diabetes.
Not only are the extra benefits attractive but MA plans often offer lower premiums, although the out-of-pocket expenses may be greater. MA plans require patients to use in-network services, which can be severely limiting in some areas. They have also been criticized for denying services that should have been approved under Medicare guidelines.
MA plans have been growing in popularity over the past two decades since it and Part D were created during the George W. Bush administration, with MA expected to account for more than half of Medicare enrollees this year.
MA plans and providers have been accused of fraud for overbilling the system, usually through upcoding, or the practice of finding a more lucrative designation for a patient’s conditions. That is because the system pays per patient, rather than for services – and the sicker the enrollee, the higher the reimbursement.
The New York Times reviewed fraud lawsuits and found almost all the top 10 carriers have been accused of fraud or of having been defrauded by providers.
UnitedHealth, which has 27.1% of the market has been accused of fraud by a whistleblower and the U.S. government, and has also been accused by the inspector general of being overbilled. Humana, with 17.4% of the market, was accused of fraud by a whistleblower and of being overbilled. Of the top 10 carriers, only Centene, with 5% of the market, was not accused of any fraud. Carriers have denied the allegations, saying their efforts were to code patients accurately.
In fact, the plans’ rich benefits are funded by overbilling, according to the reporting: “The more the plans are overpaid by Medicare, the more generous to customers they can afford to be.”
MA was devised under the Bush administration to allow private companies to lower expenses, but it has actually increased costs over traditional Medicare, according to The New York Times, adding that the additional diagnoses have led to $12 billion to $25 billion in overbilling in 2020.
While MA plans are becoming more popular, some House Democrats want to distinguish Medicare from Medicare Advantage – specifically, they want MA to drop Medicare from the name and be called Alternative Private Health Plans.
The Save Medicare Act was introduced this month by Reps. Mark Pocan, D-Wisc., and Ro Khanna, D-Calif., who say Medicare should be expanded to include the extra benefits, rather than paying private companies to handle them.
“They often leave patients without the benefits they need while overcharging the federal government for corporate profit,” Pocan said in a release. “This bill eliminates any confusion about what is – and what is not – Medicare and ensures this essential program will continue to serve seniors and other Americans for years to come.”
In June, several representatives from both parties on the House Energy and Commerce Committee said they were dissatisfied with the Centers for Medicare & Medicaid Services’ oversight of MA plans. Rep. Morgan Griffith, R-Va., said he was disappointed that CMS officials did not appear to discuss their practices before a subcommittee hearing.
“As Medicare Advantage takes on an even larger presence in the Medicare program and as the Medicare hospital insurance trust fund is projected to be insolvent by 2028, it will continue to be important to assess how well Medicare’s current payment methodology for MA is working,” Griffith said, according to the news site Fierce Healthcare, noting that the panel heard from the Department of Health and Human Services, Office of Inspector General, Government Accountability Office and Medicare Payment Advisory Commission.