“We are hearing about it more and more,” said Jacqueline Reid, a government research analyst at the Office of Inspector General who has analyzed Medicare Advantage overbilling. It’s costing us billions and continues unchecked because Medicare has become too big. This is a summary of an article from the NY Times.

“Medicare Advantage overpayments are a political third rail,” said Dr. Richard Gilfillan, a former hospital and insurance executive and a former top regulator at Medicare, in an email. “The big health care plans know it’s wrong and know how to fix it, but they’re making too much money to stop. Their C.E.O.s should come to the table with Medicare as they did for the Affordable Care Act, end the coding frenzy, and let providers focus on better care, not more dollars for plans.”

From the NY Times:

The health system Kaiser Permanente called doctors in during lunch and after work and urged them to add additional illnesses to the medical records of patients they hadn’t seen in weeks. Doctors who found enough new diagnoses could earn bottles of Champagne or a bonus in their paycheck.

Anthem, a large insurer called Elevance Health, paid more to doctors who said their patients were sicker. And executives at UnitedHealth Group, the country’s largest insurer, told their workers to mine old medical records for more illnesses — and when they couldn’t find enough, sent them back to try again.

Each of the strategies — described by the Justice Department in lawsuits against the companies — led to diagnoses of serious diseases that might have never existed. But the diagnoses had a lucrative side effect: They let the insurers collect more money from the federal government’s Medicare Advantage program.

A New York Times review of dozens of fraud lawsuits, inspector general audits, and watchdog investigations shows how major health insurers exploited the program to inflate their profits by billions of dollars.

The government pays Medicare Advantage insurers a set amount for each person who enrolls, with higher rates for sicker patients. And the insurers, among the largest and most prosperous American companies, have developed elaborate systems to make their patients appear as sick as possible, often without providing additional treatment, according to the lawsuits.

As a result, a program devised to help lower healthcare spending has become substantially more costly than the traditional government program it was meant to improve.

The government spends nearly as much on Medicare Advantage’s 29 million beneficiaries as on the combined Army and Navy. It’s enough money that even a slight increase in the average patient’s bill adds up: The additional diagnoses led to $12 billion in overpayments in 2020, according to an estimate from the group that advises Medicare on payment policies — enough to cover hearing and vision care for every American over 65.

In one early case, a Florida medical practice was accused of falsifying diagnoses to enrich its owner and Humana. When Humana told the doctor who owned the practice that his Medicare risk adjustment, or M.R.A., scores had increased significantly, he responded by email, according to the whistle-blower lawsuit: “Good, I am trying to buy that house based on M.R.A. scores.” The case was settled for more than $3 million.

One company, Mobile Medical Examination Services, worked with Anthem and Molina, among others. Its doctors and nurses were pushed to document a range of diagnoses, including some — vertebral fractures, pneumonia, and cancer — they lacked the equipment to detect, according to a whistle-blower lawsuit.

Why is this happening? Simple. Our healthcare system is overly complicated, and the temptation to make a lot of money is too easy.