A decade ago, federal officials drafted a plan to discourage Medicare Advantage health insurers from overcharging the government by billions of dollars — only to abruptly back off amid an “uproar” from the industry, newly released court filings show.
The Justice Department has accused the giant health insurer of cheating Medicare out of more than $2 billion by reviewing patients’ records to find additional diagnoses, adding revenue while ignoring overcharges that might reduce bills. The company “buried its head in the sand and did nothing but keep the money,” DOJ said in a court filing.
“It’s easy to dump on Medicare Advantage plans, but CMS made a complete boondoggle out of this,” said Richard Lieberman, a Colorado health data analytics expert. But CMS officials backed down in May 2014 because of “stakeholder concern and pushback,” Cheri Rice, then director of the CMS Medicare plan payment group, testified in a 2022 deposition made public this month. A second CMS official, Anne Hornsby, described the industry’s reaction as an “uproar.”
The CMS press office declined to make Rice available for an interview. Hornsby, who has since left the agency, declined to comment. The government argues that UnitedHealth Group knew that many conditions it had billed for were not supported by medical records but chose to pocket the overpayments. The insurer, for example, billed Medicare nearly $28,000 in 2011 to treat a patient for cancer, congestive heart failure and other serious health problems that weren’t recorded in the person’s medical record, DOJ said in a 2017 filing.
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