A major story broke this past weekend in the New York Times highlighting one of the latest ways that Big Insurance companies are taking advantage of the healthcare system. Insurance companies are now going well beyond just bending the rules to maximize profits. They are committing full-on fraud.
Two decades ago, Congress designed Medicare Advantage, a private-sector alternative to traditional Medicare, to encourage insurers to find innovative ways to provide better care at lower costs. The government would pay insurers the same amount for every patient with similar demographic characteristics. The hope behind this model was that these companies would find the most efficient way to help patients so that treatment would cost less and insurers would make more money.
In theory, the program was meant to be a win, win, win. The private insurance companies would have a profit incentive to provide more efficient care than traditional Medicare, the patient would get better service, and the taxpayer would be left with a smaller bill to pay.
That’s not what happened. Insurance companies quickly realized that since the government was paying them the same amount for every patient, they could profit the most by enrolling only the healthiest patients in the Medicare system. Healthy patients don’t require much treatment, which means more money in the insurers’ pockets.
And so insurance companies went to great lengths to only attract the healthiest seniors. Some companies went as far as to locate their enrollment offices up steep flights of stairs. Can’t get up those stairs? No Medicare Advantage for you.
Realizing this, Congress changed the Medicare Advantage model to pay insurance companies more for sicker patients. This way, there wouldn’t be an incentive only to enroll healthy seniors. But of course, this solution was quickly seen as an opportunity to make even more money because Big Insurance is basically the mafia.
What happens when you report Medicare fraud? Probably nothing
Now that insurance companies are paid more for sicker patients, doctors are incentivized to rigorously document all of a patient’s health conditions. They will now report depression or a long-ago stroke in a patient’s medical history, even when those conditions have nothing to do with the patient’s current medical care.
In some cases, doctors have been found to falsify health conditions altogether to increase a patient’s Medicare risk adjustment (M.R.A) score. The higher the M.R.A score of the patients, the more money the government will pay these medical professionals and insurance companies.
That is fraud. In an email exchange revealed in a whistle-blower lawsuit, an insurance company reached out to a Florida doctor that owned his practice informing him that his M.R.A scores had increased significantly.
His response: “Good, I am trying to buy that house based on M.R.A. scores.”
The key takeaway? Florida doctors are trying to buy houses using the taxpayer money they can squeeze out of the government by falsifying diagnoses for the Medicare patients they treat. That is the perfect microcosm of our healthcare system and everything that is wrong with it.
And why has this been allowed to go on for so long? Well, it turns out that the agency responsible for overseeing Medicare Advantage isn’t doing its job. Why? It might have something to do with the fact that several top officials have swapped jobs between the Insurance industry and the agency that is supposed to regulate it.
This is why prioritizing our health, and the health of our families is so important. The longer we can stay out of the healthcare system, the better.
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