Sen. Grassley Demands Scrutiny Of Medicare Advantage Plans

Kaiser Health News, April 19, 2017

By Fred Schulte 

The Iowa Republican has asked CMS officials to explain why they failed to collect nearly $125 million in potential overcharges identified at five Medicare Advantage plans audited in a single year.

Sen. Chuck Grassley (R-Iowa) wants federal health officials to tighten scrutiny of private Medicare Advantage health plans amid ongoing concern that insurers overbill the government by billions of dollars every year.

Grassley, the influential chairman of the Senate Judiciary Committee, has asked Centers for Medicare and Medicaid Services (CMS) officials to explain why they failed to collect nearly $125 million in potential overcharges identified at five Medicare Advantage plans audited in a single year.

In an April 17 letter to CMS Administrator Seema Verma, Grassley cited an article on alleged overcharges published in January by Kaiser Health News. The article said that Medicare had potentially overpaid five health plans $128 million in 2007, but under pressure from the insurance industry collected just $3.4 million and settled the cases.

“The difference in the assessment and the actual recovery is striking and demands an explanation,” Grassley wrote.

Medicare Advantage is a popular alternative to traditional Medicare. The privately run health plans have enrolled more than 18 million elderly and disabled people — about a third of those eligible for Medicare — at a cost to taxpayers approaching $200 billion a year. The plans also enjoy strong support in Congress.

chuckgrassley
Sen. Chuck Grassley, who chairs the Senate Judiciary Committee, wants the Centers for Medicare and Medicaid Services to explain $125 million in overcharges by insurers. (Bill Clark/CQ Roll Call)

Medicare is supposed to pay the health plans higher rates for sicker patients and less for people in good health using a formula called a risk score.

Yet CMS records reveal that billions of tax dollars are wasted annually partly because some health plans exaggerate how sick their patients are by inflating risk scores and boosting their payments improperly.

Kaiser Health News

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

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