Notice that the federal government has set up the incentives of the Medicare Advantage program so that insurers will receive benefits, but no costs, for diagnosing patients with certain conditions, that the patients have not asked them to treat. The nurse home visits aimed at harvesting diagnoses, do not benefit patients, but instead waste patients’ time and taxpayers’ money. Is UnitedHealth Group the most despicable organization for shamelessly exploiting the perverse incentives, or is the federal government the most despicable organization for creating the perverse incentives?
(p. A1) Private insurers involved in the government’s Medicare Advantage program made hundreds of thousands of questionable diagnoses that triggered extra taxpayer-funded payments from 2018 to 2021, including outright wrong ones . . ., a Wall Street Journal analysis of billions of Medicare records found.
The questionable diagnoses included some for potentially deadly illnesses, such as AIDS, for which patients received no subsequent care, and for conditions people couldn’t possibly have, the analysis showed. Often, neither the patients nor their doctors had any idea.
Medicare Advantage, the $450-billion-a-year system in which private insurers oversee Medicare benefits, grew out of the idea that the private sector could provide healthcare more economically. It has swelled over the last two decades to cover more than half of the 67 million seniors and disabled people on Medicare.
Instead of saving taxpayers money, Medicare Advantage has added tens of billions of dollars in costs, researchers and some government officials have said. One reason is that insurers can add diagnoses to ones that patients’ own doctors submit. Medicare gave insurers that option so they could catch conditions that doctors neglected to record. The Journal’s analysis, however, found many diagnoses were added for (p. A12) which patients received no treatment, or that contradicted their doctors’ views.
The insurers make new diagnoses after reviewing medical charts, sometimes using artificial intelligence, and sending nurses to visit patients in their homes. They pay doctors for access to patient records, and reward patients who agree to home visits with gift cards and other financial benefits.
. . .
The Journal consulted more than a dozen experts, including academics, actuaries and policy analysts, about its analysis of the Medicare data, who said the methodology was sound.
. . .
In the Medicare Advantage system—conceived as a lower-cost alternative to traditional Medicare—private insurers get paid a lump sum to provide health benefits to about half of the 67 million seniors and disabled people in the federal program. The payments go up when people have certain diseases, giving insurers an incentive to diagnose those conditions.
To find out how insurers use home visits to add diagnoses, the Journal interviewed nurses, patients, home-visit managers and industry executives and reviewed hundreds of pages of internal documents from home-visit companies. They described a system that used nurses, software and audits to generate diagnoses.
“They do the job with a purpose, and it pays off for the Medicare Advantage plans,” said Francois de Brantes, a former executive at Signify Health, a company that does home visits for insurers. “Identifying the diagnoses, that’s the job.”
. . .
The Journal reviewed the Medicare data under a research agreement with the federal government. The data doesn’t include patients’ names, but covers details of doctor visits, hospital stays, prescriptions and other care. The Journal identified the patients named in this article through their doctors.
Some diagnoses claimed by insurers were demonstrably false, the Journal found, because the conditions already had been cured. More than 66,000 Medicare Advantage patients were diagnosed with diabetic cataracts even though they already had gotten cataract surgery, which replaces the damaged lens of an eye with a plastic insert.
“It’s anatomically impossible,” said Dr. Hogan Knox, an eye specialist at University of Alabama at Birmingham. “Once a lens is removed, the cataract never comes back.”
Another 36,000 diabetic cataract patients didn’t receive any medical services or prescription drugs related to diabetes.
About 18,000 Medicare Advantage recipients had insurer-driven diagnoses of HIV, the virus that causes AIDS, but weren’t receiving treatment for the virus from doctors, between 2018 and 2021, the data showed. Each HIV diagnosis generates about $3,000 a year in added payments to insurers.
Everyone with HIV should be on antiretroviral drugs, the only effective treatment, and nearly all Medicare patients whose doctors diagnosed the virus took the drugs. Less than 17% of patients with insurer-driven HIV diagnoses were on them, the Journal found.
“It seems like almost all of those people don’t have HIV,” said Jennifer Kates, HIV policy director at KFF, a health-research nonprofit. “If they did, that would be substandard care at a pretty severe level,” she said.
. . .
When Congress conceived of the Medicare Advantage program decades ago, the hope was that insurers would make Medicare more efficient. In traditional Medicare, doctors and hospitals get paid for each service they provide, an incentive to provide more. The idea behind Medicare Advantage was to pay private insurers a lump sum to cover all services, giving them an incentive to keep patients healthier.
To protect insurers from the risk of winding up with sicker-than-average patients, the government allowed bigger payments for certain serious health conditions.
Partly because of that, Medicare Advantage has cost the government an extra $591 billion over the past 18 years, compared with what Medicare would have cost without the help of the private plans, according to a March report by the Medicare Payment Advisory Commission, or MedPAC, a nonpartisan agency that advises Congress. Adjusted for inflation, that amounts to $4,300 per U.S. tax filer.
Academic researchers and government investigators have raised questions about high rates of insurer-driven diagnoses in Medicare Advantage. In a 2021 report, the inspector general that oversees Medicare found the agency spent billions of dollars based on insurer-driven diagnoses for which patients received no care from doctors.
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“Any time you base a system like this on diagnosis codes, there’s going to be rampant abuse of the system,” . . . [John Gorman, a former Medicare official and founder of two companies that review records and conduct home visits on behalf of Medicare insurers] said. Insurers “will find something else to make up the revenue.”
(Note: the online version of the story was updated July 8, 2024, and has the title “Insurers Pocketed $50 Billion From Medicare for Diseases No Doctor Treated.” In the passages quoted above, I have omitted some subheadings that appear in the online and some, often different, subheadings that appear in the print, versions of the article.)
