This morning on the front page of the New York Times there is an in depth article by Reed Abelson about how insurances companies manipulate Medicare insurance claims to get BILLIONS of dollars from Medicare. This is not new news. It is a topic that has been ranted about by various media publications for YEARS. Nothing will likely change as a result of this report, but it will help you understand why I rant about these plans. If you have a subscription to NYT here is a link to the article:
https://www.nytimes.com/2022/10/08/upshot/medicare-advantage-fraud-allegations.html?smid=nytcore-ios-share&referringSource=articleShare
For people who don't have a NYT subscription, it describes how companies like United HealthCare and Anthem do everything they can to upgrade Medicare claim codes so that they can improve the payout they get from Medicare for a policy holder by presenting the policy holder as being sicker than they really are. Medicare will then provide additional funding over and above the initial allotment to the insurance company because the claims indicate the policy holder is really sick.
It might or might not affect the money the doctor charges the policy holders unless the procedure (such as a chemo treatment) requires a policy holder to pay "coinsurance". Then, the doctor also gets more money from the policy holder. Coinsurance is when the policy holder pays a percentage of the fee for service instead of a "fixed amount" for the treatment.
Example, people will say they have a copay of $30 when they go to see a specialist. It doesn't matter how long it takes to see the specialist. It can be a 5 minute office visit or a 15 minute visit, the copay is still $30. However, if the policy holder has a coinsurance procedure that is "upgraded" in terms of the complexity of the treatment, it will increase the coinsurance payment for the policy holder. Example again, the doctor visit includes a biopsy which the doctor upgrades from being a simple lab test to a more complex, but unnecessary lab test. The policy holder coinsurance will then also be higher. It's why providers are sometimes complicit in the claim code scheme.
While this exploitation is disgusting and, per the article, sucking billions of dollars out of Medicare funds, it does not address the impact on the policy holder per the coinsurance problem. Nor does it go into the other favorite way Medicare Advantage plans make money. That's by sucking money out of the policy holders via denials of claims. The way they suck money out of the policy holder is more subtle. If the policy holder pays the doctor bill when the claim is denied, then the Medicare Advantage plan doesn't have to pay the doctor. They will keep more of the allotment of money provided by the government at the beginning of the year to cover claims for the policy holder. As I have said in the past, 50% of denials are overturned if the policy holder appeals. Sadly, appealing is complicated and often people don't have the mental capacity to appeal. Insurance companies know this and exploit it.
Again, all of this has been an issue for years. Complain, complain, complain to your congressional representatives about how their inaction is hurting all of us. This issue is political party agnostic. They all get huge donations from these insurance companies and don't do anything because they don't want to lose that money.
Added on 10/10/2022:
In 2018 PBS did a wonderful documentary on how Medicare Advantage plans suck money out of Medicare. I wrote about it at the time, but am including it in this post in case it was missed:
PBS documentary about how companies that offer Medicare Advantage plans have been pushing doctors in their networks to use more serious diagnosis codes so the insurance companies can increase the amount reimbursement they get from the federal government. Companies like United Healthcare are now being sued by the government for BILLIONS of dollars in over-payment of claims. Here is a link to the program: https://www.pbs.org/video/medicare-advantage-taking-advantage-aldeae/
Added on 2/27/23:
Kaiser Foundation published a article detailing changes the current administration is trying to make to reign in money given to Medicare Advantage plans to pay policy holder claims. It is very technical, and also worded carefully so as to not alienate the insurance industry, perhaps because the Kaiser Foundation is funded by a Kaiser endowment fund. They also get grants from state governments, the very same governments that have been systematically pushing their state retirees onto Medicare Advantage plans. In any case, we all need to try to understand how our tax dollars are spend on Medicare Advantage plans. The way I see it, Medicare Advantage plans should have never been allowed to exist because all they do is suck money out of Medicare trust funds any way they can..
https://www.kff.org/policy-watch/is-the-biden-administration-proposing-cuts-to-medicare-advantage/
This analysis from Action Now, a non-partisan foundation, also did a nice job explaining how CMS is trying to rein in the excesses of Medicare Advantage sucking money out of Medicare trust funds:
https://actionnowinitiative.org/medicare-advantage/
Updated 3/28/2023
This is a detailed description of how Medicare Advantage companies suck money out of the federal Medicare program. It is sooooooo complicated. I did not understand much of it but maybe you will. Why does the federal government allow it? MA is killing Medicare:
https://www.healthaffairs.org/content/forefront/born-third-base-medicare-advantage-thrives-subsidies-not-better-care
