What We're Reading: Investigation Finds Overcharging by Medicare Advantage Plans

What we're reading, August 29, 2016: Audit finds Medicare Advantage plans overcharged the government; enrollment on the Affordable Care Act's exchanges less than half of initial prediction; and California bill to protect consumers from surprise medical bills divides physicians.

Some Medicare Advantage (MA) plans are overcharging the government by overstating the severity of certain medical conditions. According to NPR, as the popularity of MA plans grows, so does the controversy over the accuracy of billings. The formula used pays MA plans higher rates for sicker patients, and audits of 37 MA programs found overpayments in 2007. The disease categories “diabetes with complications” and “major depressive bipolar and paranoid disorders” trigger large payments, but auditors found insufficient evidence nearly half the time that these diagnoses were accurate.

Bad news for the Affordable Care Act (ACA)’s insurance exchanges keeps rolling in. First, there were multiple reports of insurers, such as Aetna, reducing their involvement in the exchanges. Now, it has been revealed that the number of people signed up for coverage is less than half of initial forecasts, reported The Washington Post. The Congressional Budget Office had estimated that 24 million people would sign up for coverage on the ACA exchanges in 2016, but just 11.1 million had signed up as of March 2016. To be fair, the initial prediction from the Congressional Budget Office had expected more people to lose insurance through their employers, which would force them to get coverage on the exchanges.

California legislators have once again introduced a bill to protect patients from surprise medical bills. The bill would require consumers to pay the equivalent of in-network rates if they are treated by an out-of-network provider during a covered service, according to STAT. For example, if an out-of-network radiologist reads an X-ray covered by insurance, the consumer pays the in-network rate. A similar bill had been introduced last year. Independent physicians are arguing that the bill would encourage insurers to keep narrow networks and ignore small practices.