Medicare Advantage: Overpaid by $3 billion in 2010by Denise Early on Jan. 27, 2012, under Health
Insurance companies that run Medicare Advantage plans were overpaid by as much as $3.1 billion in 2010, according to a report by the Government Accountability Office.
Medicare Advantage plans receive payments from Medicare for each person enrolled with them. In Arizona, the payments start at around $800 per month per person. Medicare Advantage plans also receive additional payments for members who have health problems and cost the plan more money. This is called “risk adjustment”. Apparently there were some miscalculations (by the government or by the plans?) and so Medicare paid out billions of dollars in overpayments to Advantage plans in 2010.
A Bloomberg news report on the overpayments included the following paragraph:
Medicare Advantage patients often receive superior care to those in traditional Medicare, so “conclusions about whether the MA payment system appropriately pays plans should therefore not be based on GAO’s analysis,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, a Washington trade group, in an e-mail.
A false statement:
“Medicare Advantage patients often receive superior care to those in traditional Medicare, ….”
Where did that line originate? Was it the reporter or the spokesperson for the insurance trade group? There may be a few Advantage plans that provide “superior care”, but not many – and that statement is false and misleading.
Most Medicare Advantage plans are just insurance companies that pay bills. They don’t offer any “superior care”, they just pay the doctors, hospitals, labs and other providers. Advantage plans are known as “coordinated care plans”, but this is mainly because they have a defined network of providers and their members must get a referral from their primary care physician. In fact, Advantage plans routinely refuse tests and services ordered by doctors because a panel of experts employed by the plan have deemed the service to be unnecessary – decisions doctors can and do dispute.
According to the Bloomberg article:
Enrollment in Advantage plans was about 11 million people in 2010, or about 24 percent of total Medicare beneficiaries, according to the Kaiser Family Foundation, a nonprofit research group in Menlo Park, California. The U.S. paid about $114 billion to Advantage plans in 2010, according to the GAO. Medicare cost an estimated $525 billion, according to the Centers for Medicare and Medicaid Services.
In Arizona, enrollment in Medicare Advantage is quite high among people covered by Medicare: Maricopa County: 44%; Pima County: 45; Pinal county: 49%