GAO reports billions in overpayments to private Medicare plans

The Hill: March 4, 2013

The Medicare agency overpaid private Medicare Advantage plans by at least $3.2 billion between 2010 and 2012, government auditors said Monday.

In a new report, the Government Accountability Office (GAO) criticized how the Centers for Medicare and Medicaid Services (CMS) calculates payment rates for Medicare Advantage.

According to the audit, CMS inadequately adjusts the “risk scores” for private Medicare beneficiaries compared with public, fee-for-service ones.

MA plans have an incentive to comprehensively code medical diagnoses because this can result in higher payments.

The result is a difference in “risk scores” between equivalent patient populations based on a difference in methodology between MA and fee-for-service Medicare. Read more