In a report, Medicare Advantage Fundamental Improvements Needed in CMS’ Effort to Recover Substantial Amounts of Improper Payments,” the U.S. Government Accountability Office showed that the federal Centers for Medicare and Medicaid Services estimated that it improperly paid $14.1 billion in 2013 to insurers running Medicare Advantage plans. The reason for the overpayments that health insurers could not provide documentation for the diagnoses used to support higher payments. CMS pays health plans based on the severity of illness among health plan members. Under this risk-score system, the health insurers submit diagnoses to CMS for the MA members covered under their contracts. In a series of articles, called Medicare Advantage Money Grab, journalists from the Center for Public Integrity have reported that insurers often tell CMS that their members have multiple chronic and costly conditions, thus using risk-adjusted payments to get CMS to overpay them.
