Audits reveal vast Medicare Advantage billing errors, overcharging

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Privately run Medicare Advantage plans are plagued with widespread overcharging and billing errors, according to recently released government audits.

The audits, released through a Freedom of Information Act lawsuit, involve Aetna Health, Independence Blue Cross, Lovelace Health Plan, PacifiCare and Care Plus, a division of Humana. The audit data concerns 201 patient records from each of the five plans, recorded in 2007.

The audits revealed that Medicare paid the wrong amount to nearly two-thirds of patients covered by Medicare Advantage plans, resulting in a total payment error of more than $3.3 million for just the relatively few records sampled. The auditors also could not confirm one-third of the medical conditions reported by the sampled records, due to a lack of “sufficient documentation of diagnosis.”

Risk scores for more than 800 of the total 1,005 patients whose records were audited were also found to be too high, which often led to overpayments. More than 200 patients received at least $5,000 more than was merited, the audits found.

The audit data's release follows a push from lawmakers for more scrutiny around Medicare Advantage billing. In May, Senate Judiciary Committee Chairman Charles Grassley (R-IA) requested information from Attorney General Loretta Lynch and CMS on how many risk score fraud investigations had been conducted in the last five years, and their results. Grassley's requests have yet to be answered.

That same month, Sen. Claire McCaskill (D-MO) called for CMS to investigate Medicare Advantage plans that may have inflated risk scores to receive higher reimbursements.