CMS Increases Medicare Advantage Audits to Combat Fraud and Waste

CMS Director Mehmet Oz has initiated increased auditing of Medicare Advantage (MA) plans to address fraud and waste concerns. This move aligns with signals from Senate Republicans, emphasizing bipartisan focus on MA plan oversight. Historically, MA plans have been scrutinized for systematically overcharging the government, with overbilling issues dating back to 2012. The growth of these fraudulent claims has become significant, with reports suggesting excess billing could total $140 billion. Upcoding, where patients receive more severe diagnoses on paper than in reality, is a key abuse point.

This practice allows insurers to increase their payments improperly, especially through health risk assessments conducted outside standard physician visits. United Healthcare, a major MA plan operator, has been notably implicated in upcoding issues. Policy experts suggest key reforms including banning non-physician screenings for insurance purposes and requiring independent physician-led assessments to curb fraudulent billing.

Transparency about which insurers engage in upcoding is also recommended to aid consumer decision-making. The Department of Health and Human Services must implement strong clawback measures for recovered funds to reinforce deterrence. The urgency stems from projected MA plan growth to over 40 million enrollees by 2030, which raises the stakes for Medicare cost control without compromising care quality. Director Oz's audit signals a commitment to strengthening Medicare's integrity and financial sustainability by holding MA insurers to strict standards. Future enforcement actions and policy measures will be critical to mitigating systemic MA plan abuses and preserving taxpayer resources.