Medicare Advantage plans are private options for Medicare eligible Americans. The Centers for Medicare and Medicare Services pay per diagnosis, so in effect they pay more for sicker patients. So insurers, clinics, hospitals, and physicians are incentivized to provide a longer list of diagnoses for reimbursement, whether or not the patient(s) actively has the condition. This creates a situation where Medicare Advantage plans chronically overbill, and nearly everyone else loses.
The scale of overbilling is nearly impossible to comprehend. Estimates range between $12 Billion and $25 Billion paid in 2020 alone. By way of comparison, the 2020 budget for NASA was only $21.5 Billion; the FBI’s budget was $9.8 Billion; the EPA’s was $8.7 Billion.
Eight of the ten largest Medicare Advantage insurers have been accused of submitting fraudulent bills, and four of the five largest have faced federal lawsuits for fraudulent overbilling. The fifth company is being investigated by the Department of Justice.
The practice is even promoted within hospital systems, with stories of providers and programmers being invited, then instructed, to review patients’ charts to turn up additional diagnoses. And, on the other end, intentionally failing to delete inaccurate diagnoses which are generating revenue for these insurers.
This practice hurts plaintiffs injured via medical negligence. Typically defense wants to gather all medical records for a plaintiff, and usually gathers all records from the past ten years, for example. So-called pre-existing conditions will appear in every single patient’s medical record. These medical records seemingly identify every past condition a patient has had. From gastritis (upset stomach) to chicken pox 50+ years before, or carpal tunnel syndrome resolved 25 years ago.
Finally, from a practice standpoint, what is a new physician going to focus on in a world where a new patient appears with a diagnosis list 35 items long? How many treatable or preventable conditions will be missed because of all of this “noise” appearing in the medical records
