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Medicare Failed To Recover Up To $125 Million In Overpayments, Records Show

By Kaiser Health News  
   January 06, 2017

Medicare potentially overpaid five of health plans $128 million in 2007 alone, according to confidential government documents released recently in response to a public records request and lawsuit. But officials never recovered most of that money.

This article first appeared January 6, 2017 on Kaiser Health News.

By Fred Schulte

Six years ago, federal health officials were confident they could save taxpayers hundreds of millions of dollars annually by auditing private Medicare Advantage insurance plans that allegedly overcharged the government for medical services.

An initial round of audits found that Medicare had potentially overpaid five of the health plans $128 million in 2007 alone, according to confidential government documents released recently in response to a public records request and lawsuit.

But officials never recovered most of that money. Under intense pressure from the health insurance industry, the Centers for Medicare and Medicaid Services quietly backed off their repayment demands and settled the audits in 2012 for just under $3.4 million — shortchanging taxpayers by up to $125 million in possible overcharges just for 2007.

Medicare Advantage is a popular alternative to traditional Medicare. The privately run health plans have enrolled more than 17 million elderly and disabled people — about a third of those eligible for Medicare — at a cost to taxpayers of more than $150 billion a year. And while the plans generally enjoy strong support in Congress, there are critics.

"It's unclear why the Obama Administration allowed CMS to overpromise and under-deliver so badly on collecting these overpayments," Sen. Chuck Grassley, R-Iowa, told Kaiser Health News in an email response to the findings.

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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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