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Medicare Advantage was created two decades ago. Its goal was to be a private-sector alternative to Medicare, and encourage insurance companies to offer lower costs and a better quality of care. Unfortunately, that’s not really what happened and a lot of the insurers who were part of the program chose to exploit the program instead. Sadly, their goal was to create additional profit for themselves.
Insurers who are part of the Medicare Advantage program are paid by the government. For each person who enrolls in the program, the government pays the insurance company a fixed amount. Patients who aren’t as healthy are paid at higher rates, in an effort to encourage insurers to take these patients instead of only choosing healthy individuals.
Audits, investigations, and lawsuits are showing a disturbing pattern of insurers inflating profits by finding ways to exploit these government incentives. Eighty percent of the largest insurers in the Advantage program have submitted bills that were inflated, and there are additional insurers under investigation.
There are two common allegations against these insurance companies. The first is that the companies didn’t change diagnoses that were found to be incorrect, so they would be paid more for the patient. The second is that companies looked through the patients’ medical records to find additional illnesses, also to receive more money per patient. Most of the lawsuits came from whistle-blowers who were former employees of the insurance companies.
Out of the 21 cases that have been made public, the Justice Department has joined or brought 12 of them. There are additional cases under review, and whistle-blower cases aren’t made public until that review is complete. The insurance companies in question are vigorously defending their compliance, and insist that there hasn’t been any wrongdoing.
It remains to be seen what the results of the investigations and lawsuits will ultimately be, and whether the insurance companies will be found at fault or in violation of the Medicare Advantage requirements.
To learn more and to create or update your estate planning documents, contact us at The Estate Planning & Legacy Law Center today!