Humana, Cigna, and other health insurers made billions on made-up diagnoses
Health insurers hit the jackpot by billing Medicare for unverified and untreated patient diagnoses.
The Wall Street Journal published a damning piece on Medicare insurers yesterday, claiming that companies such as UnitedHealth Group, Humana, and Cigna pocketed $50 billion from Medicare for diseases that doctors hadn’t treated. From the WSJ:
“Private insurers involved in the government’s Medicare Advantage program made hundreds of thousands of questionable diagnoses that triggered extra taxpayer-funded payments from 2018 to 2021…
Instead of saving taxpayers money, Medicare Advantage has added tens of billions of dollars in costs, researchers and some government officials have said. One reason is that insurers can add diagnoses to ones that patients’ own doctors submit. Medicare gave insurers that option so they could catch conditions that doctors neglected to record. The Journal’s analysis, however, found many diagnoses were added for which patients received no treatment, or that contradicted their doctors’ views.
Insurers added diabetic cataract diagnoses to 148 patients treated by Dr. Howard Chen, an ophthalmologist in Goodyear, Ariz. He said he saw at most one or two such cases a year. He said he charges insurers $40 per patient to cover his costs for providing them with medical charts. “If they are just making stuff up, then why do they even need or want my charts?” said Chen.
A synopsis of what happened:
The government pays insurers more for some patient diagnoses than other diagnoses
The government allows insurers to diagnose their own patients
The government doesn’t check to see if patients are actually being treated for their diagnoses
Leading to an obvious result:
Insurer-driven diagnoses by UnitedHealth for diseases that no doctor treated generated $8.7 billion in 2021 payments to the company, the Journal’s analysis showed. UnitedHealth’s net income that year was about $17 billion.
Should we really be surprised by this? If Medicare would pay you, a health insurer, $2,863 per patient with a diabetic cataracts diagnosis, and you were to then diagnose 66,000 patients who had already had cataracts surgery (meaning they would most likely never need another operation) with diabetic cataracts, and the government never verified whether or not the patients actually needed treatment, you would stand to make a lot of money. Now expand this payout structure from diabetic cataracts to include dementia, Parkinson’s, HIV, and other conditions, and you can quickly see how lucrative a series of liberal diagnoses would be.
My first thought was, “How did insurers get away with this for so long?” But I guess in an industry where hospitals can charge $60 for an ibuprofen tablet and no one bats an eye, $50 billion from ghost diagnoses shouldn’t be that shocking.
