government
GAO: Medicare private plans overpaid due to risk scores
NEWS IN BRIEF — Posted Feb. 6, 2012
The Medicare program overpaid Medicare Advantage plans by as much as $3.1 billion in 2010 because of differences in diagnostic coding between private plans and the traditional plan, government auditors found.
Coding differences led to higher payments for private insurers compared with pay in the Medicare fee-for-service program, according to a January report by the Government Accountability Office. The Centers for Medicare & Medicaid Services should improve the accuracy of pay adjustments made because of differences in coding, the GAO recommended.
CMS calculates a risk score for every Medicare beneficiary. Chronic conditions, disabilities, age and enrollment in the Medicaid program are all factors used when compiling risk scores. For Medicare Advantage plans, the scores provide a financial incentive to cover all types of patients regardless of health status or the resources they are likely to consume, the GAO said.
The Medicare agency said it found the study insightful, but it did not comment on the recommendation in a memo responding to the report. In 2010, CMS spent $114 billion on the Medicare Advantage program.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2012/02/06/gvbf0206.htm.
