The Wall Street Journal recently reported on alleged systemic fraud by private insurers participating in the Medicare Advantage program. The insurers claimed erroneous diagnoses and, as a result, received more than $50 billion in extra payments from Medicare.
Analysis from the Wall Street Journal
Analysis from the Wall Street Journal showed that between 2018 and 2021, insurers claimed thousands of questionable diagnoses, resulting in government reimbursements. Some of the more extreme diagnoses found were AIDS as well as ailments that would have been all but impossible for the patient to have.
Example of HIV Diagnoses
Of the shocking findings, around 18,000 Medicare Advantage recipients were diagnosed by insurers with HIV, but only about 17 percent of that population was taking the treatment protocols for the severe condition.
When a population is diagnosed by a physician with HIV rather than an insurance company, the patient is generally 92% likely to be on a treatment protocol.
Diabetic Cataracts Misdiagnoses
Similarly, Medicare Advantage beneficiaries were significantly more likely to have been diagnosed by insurers with a severe condition of diabetic cataracts, which is a more costly and, therefore, profitable diagnosis than cataracts alone. Doctors report that the number of diagnoses is implausible.
The Case of Gloria Lee
One woman featured in the Wall Street Journal report, Gloria Lee, was diagnosed by her insurer as having diabetic cataracts. Still, Lee’s doctor confirmed that Lee did not have diabetes.
Financial Incentives for Insurers
Adding additional and heightened diagnoses results in higher payments to insurers from the Medicare program.
Systemic Issues with Medicare Advantage
The issues are systemic with Medicare Advantage, which enjoys the unique privilege of being a government entitlement program yet administered by a private insurance plan. The idea behind the program’s creation was to manage costs by allowing beneficiaries to select private insurers.
Increased Costs from Medicare Advantage
However, Medicare Advantage plans have increased costs totaling tens of billions of dollars. This occurs because insurers are able to add diagnoses to beneficiaries outside of the physician’s oversight.
Diagnoses Without Corresponding Care
For Medicare to reimburse for care for the diagnoses recorded by the insurers, the patient does not even need to have received care.
Home Visits and Artificial Intelligence
Medicare Advantage can access and add the diagnoses by making home visits and using artificial intelligence technologies to process medical records and add whatever the insurer wishes.
Access to Medical Records
The insurers gain access to the medical records by paying doctors and giving patients gift cards for access.
Testimony from Dr. Howard Chen
An ophthalmologist interviewed in the Wall Street Journal feature, Dr. Howard Chen, told the publication that many of his patients had been diagnosed by insurers with diabetic cataracts, although he rarely encountered patients with that diagnosis.
Insurers’ Defense
Insurers have defended their business practices, stating that they require accurate diagnoses and ensure patients receive the care for their diagnoses.
Efforts to Address Systemic Abuse
To deal with the current systemic abuse of diagnoses that involve a heightened payout, Medicare administrators are reviewing the list of conditions that allow for extra payments. As the diagnoses are reviewed, new diagnoses are making the list concurrently, suggesting an ongoing dilemma with Medicare reimbursements to private insurers.
