Insurers Gained $50 Billion From Medicare for Untreated Diseases (Wall Street Journal)

Insurers Gained $50 Billion From Medicare for Untreated Diseases

Monday, July 8th, 2024 Fraud Insurance Industry Legislation & Regulation Technology

Private insurers in the Medicare Advantage program garnered $50 billion from 2018 to 2021 through questionable and often false diagnoses, as revealed by a Wall Street Journal analysis of Medicare records. These diagnoses, including serious conditions like HIV and diabetic cataracts, triggered extra taxpayer-funded payments despite patients receiving no subsequent care. Medicare Advantage, designed to save taxpayers money, has instead inflated costs by adding diagnoses that patients’ doctors neither recognized nor treated. Insurers conducted chart reviews and home visits, often using AI to identify additional conditions, incentivized by financial rewards for both patients and medical professionals.

The inflated diagnoses were significant, with examples like diabetic cataracts being diagnosed at implausible rates by insurers like UnitedHealth compared to traditional Medicare. Some conditions were impossible, such as diagnoses of cataracts in patients who had already undergone surgery. The government’s efforts to curb these practices include changes to the list of conditions warranting extra payments, but experts believe that as long as the system is based on diagnosis codes, abuse will persist.

Efforts to rectify these misdiagnoses are underway, with audits and policy changes, but the fundamental incentive structure of Medicare Advantage continues to drive insurers to find ways to maximize their revenue. Patients and doctors often remain unaware of these added diagnoses, underscoring a systemic issue within the current healthcare reimbursement framework.


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External References & Further Reading
https://www.wsj.com/health/healthcare/medicare-health-insurance-diagnosis-payments-b4d99a5d

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