WASHINGTON – The Biden administration estimated on Monday it could collect up to $4.7 billion from insurance companies with newer and harsher penalties for filing improper charges on the taxpayer’s tab for Medicare Advantage care.
been a federal guard for years the alarm about questionable allegations about the private version of the government’s Medicare program, with investigators raising the possibility that insurance companies cheat taxpayers out of billions of dollars each year by claiming members are sicker than they really are in order to receive overpayments.
The Department of Health and Human Services said it will begin collecting payments from insurers if a scrutiny emerges that they are being billed for diagnoses not reflected in the patient’s medical records. The government has not sought a refund for those payments in over a decade, the agency said.
“Today we are taking some long overdue steps to move toward accountability,” HHS Secretary Xavier Becerra said Monday during a phone call with reporters.
The penalties are expected to net $4.7 billion over the next decade, the agency estimates.
The questionable payments are submitted through Medicare Advantage, a booming program that nearly half of the 60 million people enrolled in Medicare enroll in. Medicare Advantage differs from traditional Medicare because private companies offer plans that are reimbursed by the government for care. The government spent a total of $900 billion on Medicare last year.
As its popularity grows, there is a growing concern that insurers are ripping off taxpayers by exaggerating how ill a patient is in order to unlock higher reimbursements from the government. The HHS office of the inspector general, for example, raised red flags for payments worth $6.7 billion for patients whose diagnoses were not supported by medical records in 2017.
Insurers have braced themselves for a battle against the long-awaited final rule, with company leaders raising concerns about the accuracy of the audits. The move will raise insurance rates, warned Matt Eyles, the president of America’s Health Insurance Plans, the lobbying arm for health insurance companies.
“Our view remains unchanged: this rule is unlawful and fatally flawed, and it should have been withdrawn rather than finalized,” Eyles said.
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