The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Health Care Giants Scam Medicare Advantage

Aug 30, 2021

The federal government is suing Kaiser Permanente for grossly overcharging Medicare with falsely inflated claims.

The Department of Justice joined six already-existing lawsuits against Kaiser, filed by Kaiser employees. These whistle-blowers say that Kaiser has been overstating the severity of some patients’ chronic illnesses so that it can get more money from the Medicare Advantage program.

These employees report a systematic culture of fraud at Kaiser, coming from the highest levels of the company. For example, they describe “coding parties” for doctors, where Kaiser management puts doctors together in a room with computers and tells them to change some of their diagnoses, sometimes months after a patient’s visit.

This is all the more striking as Kaiser is often held up as a model of how to deliver health care efficiently. But it’s certainly not just Kaiser. “It’s industry-wide and it’s of major proportions,” said a lawyer who represents whistle blowers. She added that there is even a cottage industry of companies that specialize in “advising” health care providers on Medicare filings—that is, showing them how to scam the system.

Sure enough, the DOJ has charged more than a few big health care companies with Medicare fraud. Two of the companies, Healthcare Partners and Sutter Health, have settled cases against them to the tune of 270 million dollars and 30 million dollars, respectively.

Another lawsuit against Sutter, as well as lawsuits against the two largest health insurers in the U.S., UnitedHealth and Anthem, are still going on.

The Government Accountability Office estimated in 2014 that almost 10% of the payments Medicare Advantage made were fraudulent—which today would mean 30 billion dollars a year in fraudulent Medicare Advantage payments pocketed by these greedy companies.

When multi-billion-dollar companies scam tens of billions of dollars out of the health care system like this, it is no surprise that health care is so extremely expensive in the U.S.—while tens of millions of Americans, mostly and especially working class Americans, can’t get health care when they need it.