A Wall Street Journal (WSJ) analysis discovered that health care insurers received at least $4.3 billion over three years for patients who lived in other states, meaning Medicaid – the joint federal and state program that provides health coverage to low-income individuals and families – paid twice, and sometimes even more, for the same recipients. The data showed that patients with tax-funded health care coverage who had moved from one state to another were being “covered” in both states. In fact, both Medicaid and Medicare (the federal program primarily for people 65 and older) were found to be making erroneous double payments, and the two combined cost taxpayers more than $1.8 trillion a year.
Taxpayers on the Hook for Billions in Erroneous Health Care Payments
It is up to each state to design their Medicaid programs to see who is eligible to receive benefits and what types of services will be covered. While the federal government provides more than half the costs, the states are in charge of monitoring people and their qualifications, including checking yearly to make sure patients are still eligible. They are supposed to follow federal guidelines, of course, but some of the problem stems from not knowing when a patient has relocated.
Patients are supposed to cancel their Medicaid when they move to another state and then sign up at the new residential location. However, this doesn’t always happen, and states may not be aware for a while. Or, as was reportedly the case for Centene, a health care company, some insurers have ignored the rules to reap more benefits. In a Microsoft Teams message, acquired by WSJ, a Centene supervisor wrote:
“Please DO NOT close cases when you learn a member has moved out of state. If the member shows eligible and are out of state, they can still can [sic] utilize some of the benefits.”
The spokesperson said the company has to maintain coverage for members until the state makes a decision on whether to disenroll a beneficiary.
“Paying for a beneficiary’s Medicaid coverage in one state when that individual is already enrolled in a different state is a prime example of taxpayer dollars being mismanaged,” a spokeswoman for the federal Medicare and Medicaid agency told WSJ.
The Journal’s analysis covered 2019 through 2021 and found that Centene, the biggest Medicaid insurer, received $620 million in duplicate payments during that time. Elevance Health collected $346 million, and UnitedHealth Group received $298 million. These three companies brought in more than $200 billion in Medicaid premiums last year. Furthermore, “Centene insured about 25,000 people a year, on average, in two different states at the same time. For those people, the company was paid at least $151 million extra. Elevance received $48 million extra for covering the same person twice, and United Health got $53 million,” WSJ explained. The analysis showed that in some cases, individuals were signed up in five or more states.
Other Suspicious Charges
The Wall Street Journal’s analysis dove even deeper and found several other ways that insurers and providers were gouging patients and taxpayers.
Diseases Not Treated by Any Doctors
Medicare Advantage allows private insurers to oversee Medicare benefits, with the explanation that it would be more economical and convenient, especially for seniors and those with disabilities. Instead, some researchers and government officials have said the program has added tens of billions of dollars in costs. One cause of this is because insurers can add diagnoses to the patients’ charts that their doctors submit. However, a lot of the diagnoses were questionable, to say the least. WSJ reported that “[t]he questionable diagnoses included some for potentially deadly illnesses, such as AIDS, for which patients received no subsequent care, and for conditions people couldn’t possibly have.” The report continued, “Often, neither the patients nor their doctors had any idea the diagnoses had been made.”
For example, insurers added diabetic cataract diagnoses to 148 patients treated by Dr. Howard Chen, an ophthalmologist in Arizona, an exclusive from The Wall Street Journal revealed. Chen, however, said he at most saw one or two cases a year. He receives $40 per patient when he provides insurers access to their health records, part of the Medicare Advantage practice. “If they are just making stuff up, then why do they even need or want my charts?” he said.
From 2019 to 2021, Medicare paid about $50 billion for diagnoses added just by the insurers, that no doctor or hospital treated, the analysis discovered.
At-Home Visits
A good practice in theory, and something that has been beneficial in making sure patients are taking their medication even in discovering diseases that were missed by physicians, this at-home visit program is also under scrutiny.
A Wall Street Journal investigation found that companies pushed nurses to “run screening tests and add unusual diagnoses, turning the roughly hourlong stops in patients’ homes into an extra $1,818 per visit, on average, from 2019 to 2021. Those payments added up to about $15 billion during that period.”
Nurse practitioner Shelley Manke, who used to work for the HouseCalls unit of UnitedHealth Group, told WSJ that she used to make a half-dozen visits a day. Part of her routine was to warm up the big toe of her patients and use a testing device to measure how well blood was flowing to extremities, checking for peripheral artery disease. Each new case they got entitled insurers to collect an extra $2,500 per year.
Manke said she didn’t trust the device, that she’d tried it on herself several times and kept getting different results, but the company insisted the nurses continued using it. “It made me cringe,” she told WSJ. “I didn’t think the diagnosis should come from us, period, because I didn’t feel we had an adequate test.”
The analysis found that “More than 700,000 peripheral artery disease cases diagnosed only during home visits added $1.8 billion in payments during those three years.”
Opioid Doses
Medicare has a cap on opioid doses but it is listed as a recommendation instead of a requirement, so only about half of Medicare drug plans adopted it. “As a result,” WSJ said, “hundreds of thousands of patients continued to get potentially dangerous opioid dosages exceeding that cap, paid for by their Medicare drug plans.”
Veteran Services
The government paid about $44 billion from 2018 through 2021 to insurers to cover Medicare Advantage-plan members who were users of VA services. “Many of those beneficiaries received some or all of their care from the VA, which is taxpayer funded and doesn’t bill Medicare insurers. That makes those patients some of Medicare Advantage companies’ most lucrative customers.”
While it is understandable that it may take a little bit to discover when patients have moved out of state, that doesn’t excuse the other actions of Medicaid and Medicare insurers. Private insurers oversee Medicaid benefits for more than 70% of the nearly 72 million low-income and disabled people in the program, WSJ explained, and the companies get paid each month for each person they cover. The incentive to keep these people on their “payroll” may be too much for some companies to ignore.
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