GAO States CMS Overpaid Medicare Advantage Plans During the Years of 2010 to 1012–Flawed Risk Assessment Calculation Errors
CMS Discovers That Insurers Offering Medicare Advantage “Really Know How To Sharp Shoot A Model With Adjusting Risk For Profit”, A Common Everyday Occurrence in Financial Markets… - Medical Quack
A report issued this week by the Government Accountability Office reports that the Centers for Medicare & Medicaid Services overpaid the Medicare Advantage program run by private health insurers by between $3.2 billion and $5.1 billion for the years 2010-2012.
Insurers who run MA plans are paid a set amount per beneficiary, adjusted by a risk score that calculates the expected consumption of health services in the coming year for each beneficiary.
In practice, the risk scores for beneficiaries with the same health conditions and with the same demographic profile should be the same. However, the GAO discovered in its analysis that coding differences between Medicare Advantage enrollees and those enrolled in the traditional fee-for-service Medicare plan led to “inappropriately high MA risk scores and payments to MA plans.”