Medicare Advantage creates an environment for fraud

by admin on 04/27/2019 2:13 AM

Cloud of secrecy’ in Medicare Advantage plans can create an environment for fraud.

By Jeanne A. Markey and Raymond M. Sarola
STAT, February 8, 2019

Over the last two decades, federal and state governments have dramatically increased their payments to private health care companies that manage Medicare Advantage and Medicaid managed care plans, now paying them around $400 billion a year.

Although these companies take in a tremendous amount of taxpayer money and have immense power regarding how to distribute these funds, a cloud of secrecy shields from public view their financial operations and profitability. The unique environment in which Medicare Advantage and Medicaid Managed Care plans operate — enormous amounts of money to be spent, a thicket of government reimbursement guidelines, little transparency, typically no party with equal bargaining power, and what amounts to an honor system — can create a recipe for cooking up fraud. . .

In September 2018, the federal government issued a report that revealed another type of fraud in this area: “widespread and persistent performance problems related to denials of care and payment.” This report found that Medicare Advantage organizations improperly denied coverage for health care services in many cases and forced patients to endure lengthy appeals processes to obtain their proper coverage. The types of fraud that can arise are likely to increase over time. . . When companies that manage Medicare Advantage and Medicaid managed care plans receive hundreds of billions of dollars from the government on what is basically an honor system without sufficient transparency into how that money is spent or retained, fraud almost always ensues. Anyone who witnesses such unscrupulous activities and steps forward to bring it to light is doing the right thing for his or her fellow Americans.

Jeanne A. Markey, J.D., is a partner at Cohen Milstein Sellers & Toll LLP and co-chair of its Whistleblower/False Claims Act practice group.
Raymond M. Sarola, J.D., is an associate in that group.

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Government is not the solution to our problems,
government is the problem.
– Ronald Reagan

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