Watch Phil Capriotti on The Wealth Council

LEARN MORE
CLIENT PORTAL

Watchdog Estimates $7.5 Billion Medicare Advantage Overpayment from “Questionable” Health Risk Assessments

When the Centers for Medicare & Medicaid Services (CMS) pays Medicare Advantage (MA) organizations, they increase the payments when plans enroll sicker people. This is called risk adjustment, and it is an important guardrail to ensure that all people with Medicare have access to MA plans; without risk adjustment, plans would have reasons to avoid covering people in worse health.

But getting risk adjustment right is difficult, and the higher payments give MA organizations an incentive to make their enrollees look sicker than they really are. If plans can make a healthy person look unhealthy—a process called upcoding that involves recording paper-only diagnoses—they may be able to collect those higher payments without actually providing more care. Researchers have shown that MA plans tend to enroll people who are healthier than average and use upcoding to drive up payment for these healthy individuals. If allowed to continue, some estimates put these overpayments at over $1 trillion dollars for the next decade.

A new report from the Department of Human Services Office of Inspector General (OIG), a federal watchdog agency, points to the use of Health Risk Assessments (HRAs) in driving much of this upcoding-related overspending. HRAs are often performed by companies that the plans own, and this type of integration increases the likelihood they will drive up diagnoses and collect higher payment.

To conduct HRAs, plans send representatives to visit enrollees in their homes and collect information about their health and habits. In many cases, this information is then used to diagnose the individual with conditions that make them look sicker than they are, but without leading to any follow-up care or additional spending for the plans. OIG found that some diagnoses show up much more often on HRAs than provider visits, including diabetes with chronic complications and myasthenia gravis, a serious neuromuscular disease.

OIG estimates that HRAs with no additional spending led to $7.5 billion in increased MA payment in 2023. This work follows previous OIG findings that HRAs drive upcoding, and OIG recommends that CMS bar HRAs from being used to increase risk adjustment payments.

At Medicare Rights, we have long been concerned that HRAs and other upcoding are erroneously driving MA payment, and we agree with OIG that HRAs should not be used to do so. As OIG notes, diagnoses without follow-up care or treatments suggest those diagnoses are fictitious or that people are going without needed care. Neither is acceptable.

MA overpayment burdens people with Medicare and other taxpayers. More than half of people with Medicare get their coverage from MA. If enrollment continues to rise, more and more overpayments will happen every year.

We urge policymakers to rein in these practices, including a complete overhaul of MA payment. Private insurers must not be permitted to abuse and, in some cases, defraud beneficiaries and taxpayers.

Watchdog Estimates $7.5 Billion Medicare Advantage Overpayment from “Questionable” Health Risk Assessments

Share:

View the Latest Posts:

Medicare Changes for 2027: 7 Things You Need to Review Before Keeping Your Current Plan

Your Medicare coverage may look the same on the surface, but important changes to your benefits, prescription costs, and provider networks could affect what you pay next year. For millions of Americans, Medicare provides essential health coverage and greater confidence about the future. But one of the biggest mistakes Medicare beneficiaries can make is assuming that the plan they have today will automatically be their best option tomorrow. As we approach 2027, Medicare beneficiaries have important decisions to make. Insurance companies can adjust premiums, change prescription drug coverage, modify provider networks, and update benefits from one year to the next. The good news? You have an opportunity to review your options before these changes take effect. Medicare’s Annual Enrollment Period runs from October 15 through December 7, 2026, giving eligible beneficiaries the opportunity to review and make changes to their Medicare health and prescription drug coverage for 2027. Changes made

Your Medicare Plan May Be Changing—Even If Your Health Hasn’t

You’re happy with your doctors. Your prescriptions haven’t changed. Your Medicare coverage worked well this year. So, is reviewing your plan really necessary? It’s a worthwhile step. Your healthcare needs may stay the same while your plan’s costs and coverage change. Taking time to review the details this fall can help you make a more informed decision about the year ahead. Medicare Open Enrollment runs October 15 through December 7 each year. Changes made during this period take effect January 1, as long as the plan receives your enrollment request by December 7. That means this fall’s enrollment decisions affect your coverage for 2027. Start With the Notice You Might Be Tempted to Skip If you have a Medicare Advantage or prescription drug plan, your plan sends an Annual Notice of Change, often called an ANOC, each fall. It explains changes to costs, coverage, and other plan details that begin

Medicare Open Enrollment 2027: 7 Things to Review Before December 7

Medicare Open Enrollment is one of the most important times of the year for people who already have Medicare. From October 15 through December 7, 2026, Medicare beneficiaries have an opportunity to review their current coverage and make changes for 2027. Any coverage changes made during this period generally take effect on January 1, 2027. Even if you are satisfied with your current plan, taking time to review your coverage can be worthwhile. Medicare Advantage and prescription drug plans can change from year to year—including premiums, provider networks, prescription drug coverage, copays, deductibles, and additional benefits. Here are seven areas worth reviewing before making your Medicare decisions for 2027. 1. Review Your Current Plan’s Changes for 2027 One of the biggest Medicare mistakes is assuming that because a plan worked well this year, it will automatically work the same way next year. Plans may change their: Monthly premiums Deductibles Copayments

Before Your Next Appointment: 5 Medicare Questions That Can Help Prevent Costly Surprises

You schedule an appointment, hand over your insurance card, and assume your coverage will take care of the rest. Then a bill arrives—or the pharmacy tells you that your new prescription needs approval. Understanding your Medicare coverage before you use it can help you prepare for expenses, address paperwork, and ask better questions. Whether you are new to Medicare or have had coverage for years, these five questions are worth keeping handy. 1. Can I Use This Doctor With My Coverage? “Do you take Medicare?” is a starting point, but the next question depends on how you receive your benefits. With Original Medicare, you can generally use doctors and hospitals that accept Medicare throughout the United States. Ask whether the provider accepts assignment, meaning they agree to accept the Medicare-approved amount as full payment for covered services. With Medicare Advantage, you may need to use your plan’s network for non-emergency