Medicare Advantage Plans' Fraud Oversight Weak, Says OIG

Medicare Advantage covers about 24% of Medicare beneficiaries and accounted for $115 billion of the total $504 billion in Medicare benefits in 2010, OIG said.

In an era of constrained budgets, however, the program and its mounting costs have come under more scrutiny from the federal government. The Medicare Payment Advisory Commission estimated that CMS spends about 10% more on beneficiaries Medicare Advantage plans than it does for beneficiaries in traditional fee-for-service Medicare.

HHS in its 2010 financial report identified a composite payment error rate of 14.1% for Medicare Advantage programs.

While 33 of the 170 organizations audited detected no fraud or abuse, another 24 organizations identified only Part C fraud incidences and 11 organizations identified only Part D incidents. These 68 organizations covered a total of 571,623 beneficiaries.

For the 137 Medicare Advantage organizations that reported fraud and abuse, the volume varied widely. Fourteen organizations each identified more than 1,000 incidents while 41 organizations identified fewer than 10 incidents, the audit said.