Private Medicare Advantage plans treating the elderly have overbilled the government by billions of dollars, but rarely been forced to repay the money or face other consequences for their actions, according to a congressional audit released Monday.
The Center's investigation traced the overpayments to abuse of a billing formula called a risk score, which pays higher rates for sicker patients and less for people in good health. Since 2004, however, the risk score formula has largely operated as an honor system, despite criticism that many health plans have overstated how sick some patients are to boost their revenues. That practice is known in medical circles as "upcoding."
While federal auditors have struggled for years to root out these overcharges, at least a half-dozen whistleblowers have filed lawsuits accusing Medicare Advantage plans of ripping off the government.
