Explaining Medicare Advantage, and why it matters to you

Introduction

What is the difference between Medicare Advantage and Medicare?

They’re two sides of the same coin. By choosing standard Medicare, people can visit any doctor they want. But they may have to buy supplemental insurance to cover gaps in what Medicare will pay for. This option is called “fee-for-service.”

By contrast, Medicare Advantage plans accept a set fee from the government for covering a person’s health care. The plans may provide extra benefits, including gym memberships and eyeglasses and cost patients less out of pocket than standard Medicare. Medicare Advantage is growing rapidly and now serves about 16 million people, about a third of all people on Medicare.

I’m a taxpayer. Why does this matter to me?

It matters because it costs taxpayers $150 billion a year. Medicare costs are threatening to swamp the federal treasury and policymakers agree the program can ill afford waste and billing abuses. Young people should care about this spending so that Medicare will be there for them when they need it.

What are risk scores?

A risk score is a formula the government uses to pay Medicare Advantage plans. The system is supposed to pay higher rates for sicker patients that are likely to require more costly medical services and less for healthy people.

Why were risk scores adopted?

Congress wanted to make sure health plans wouldn’t shy away from taking sicker patients who could cost them more to treat.

I’m covered under Medicare Advantage. Can I look up how my doctor uses risk scores?

No. The process goes on behind the scenes and it’s so complicated many people in the health care industry don’t fully understand how it works.

As the baby boomer generation ages, isn’t it possible that the U.S. population is just sicker and requires more costly care?

It’s hard to say definitively without knowing a lot of medical details about individual patients. The government has not made this sort of data available. We are hoping that our lawsuit will shed some light on this.

What does this alleged overbilling mean for Obamacare?

The Affordable Care Act is using risk scoring and some policy experts worry that the system will prove extremely difficult to police — especially given the government’s history with Medicare Advantage.

Is there any chance of recouping any of the $70 billion in “improper” payments?

The Centers for Medicare and Medicaid Services, which runs the program, has broad authority to recoup overpayments, but has shown little interest in doing so. Instead, health plans suspected of overbilling have paid little penalty and can count on the government to keep their identities secret.

How did you come up with the idea of doing this investigation?

In 2012, we published the series Cracking the Codes, which exposed how thousands of doctors had steadily billed higher rates over the past decade, costing taxpayers billions of dollars. After that, I wanted to look at Medicare Advantage because it has grown so quickly, costs taxpayers a bundle and has been the focus of much less scrutiny both from government and the media. For instance, Medicare officials have recently released vast amounts of billing data for fee-for-service Medicare, but are keeping Medicare Advantage data under wraps.

If you didn’t get a response from your FOIA request, where did the data for this investigation come from?

Months and months of searching public records, including federal and state court records and websites, and interviewing experts. Given the sheer complexity of Medicare Advantage, federal officials must post a good deal of information online.

There are also many health lawyers who advise the industry and data companies that assist with billing who discuss these issues online.

CMS posted some limited Medicare Advantage data online (2007 through 2011) after a researcher sued them.

How would you augment this investigation if you were to receive records from your FOIA request?

We want to tell people how CMS makes decisions and how well it safeguards taxpayer dollars. That’s very hard to gauge right now because the agency is secretive, won’t grant interviews to the media and pretty much ignores requests for public information.

We also want to know about political and lobbying pressures officials face — basically the same sort of accountability journalism we’ve been doing at the Center for Public Integrity for years.

What’s coming next?

We are committed to covering this program and greatly appreciate hearing from anyone with a story to tell about how it works.

Are you a health professional or medical coder and have a story to tell about Medicare Advantage billing issues or “risk scores”?

Or are you a patient in a Medicare Advantage plan and have been scheduled for a “home visit”? Let us know if the visit was helpful to you or not.

Please email me at fschulte@publicintegrity.org or call 202-481-1210.

Have your own question for Fred? Leave it in the comments below, and if we can answer it, we’ll do so and add it here.