Health Care Giants Are Making Millions off of Unfair Medicare Overpayments
Health insurers have made millions of dollars off of overpayments from Medicare. The industry is gearing up to fight any effort for the government to demand that money back.
The Biden administration is expected to finalize a rule next month to try to recoup overpayments — but Medicare Advantage insurers are threatening to sue if the rule moves forward as written. (ATU Images / Getty Images)
This year, for the first time, a majority of seniors eligible for Medicare will be on privatized Medicare Advantage plans. Now, the insurance companies raking in giant profits from these for-profit plans are mounting a pressure campaign and planning to sue the government to protect years of overpayments they’ve extracted from Medicare.
A cash cow for big insurers, the for-profit version of Medicare has not been a great deal for the American public. Medicare Advantage plans cost the government more per beneficiary than traditional Medicare, and often wrongfully deny care.
What’s more, federal audits have found Medicare Advantage plans systematically overbilling the public — mostly by billing as if patients are sicker than they really are, a scheme known as “upcoding.” Officials estimate that the private plans collected $650 million in overpayments from 2011 to 2013.
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