Senate Report Exposes Medicare Advantage Gaming

Sen. Chuck Grassley (R-Iowa), chair of the Senate Judiciary Committee, released a majority staff report on UnitedHealth Group’s (UHG) efforts to maximize Medicare Advantage (MA) income by “turning risk adjustment into its own business and siphoning off taxpayer money in breach of the program’s original intent.”

The nation’s largest Medicare Advantage Organization (MAO), UHG has been underneath scrutiny lately. In 2024, investigative exercise and reporting—particularly, from the Department of Health and Human Services Office of the Inspector General (HHS OIG), The Wall Street Journal, and STAT News—revealed obvious UHG coding abuses, spurring Sen. Grassley to request details from the insurer about their billing practices.

In response, UHG offered Sen. Grassley with over 50,000 pages of paperwork, together with inside coaching supplies, insurance policies, software program documentation, and audit instruments. Staff overview of these data discovered that “UHG has turned risk adjustment into a major profit centered strategy.” The report out this week describes how the corporate makes use of “aggressive strategies” to maximise threat adjustment scores and seize “higher payments from the Centers for Medicare and Medicaid Services (CMS) than any of its peers.” It explains that “UHG appears to be able to leverage its size, degree of vertical integration, and data analytic capabilities to stay ahead of CMS’s efforts to counteract unnecessary spending related to coding intensity.”

MA Payments and Coding Abuses

The Centers for Medicare & Medicaid Services (CMS) pays Medicare Advantage (MA) plans a set quantity for every enrollee, rising funds for sicker enrollees. This is known as threat adjustment, and it is a crucial guardrail to make sure that all folks with Medicare have entry to MA plans; with out it, plans would have causes to keep away from protecting folks in worse well being.

But there’s a flip aspect: the promise of upper funds can incentivize MA organizations to make their enrollees look sicker than they are surely. Insurers might meticulously doc sufferers’ situations to provide the next threat rating that can in flip produce greater funds, which is called “coding intensity.” They can also engage in “upcoding,” the fraudulent practice of recording paper-only diagnoses with out truly offering extra care. 

Coding exploitation will not be a brand new phenomenon. The report states that “Senator Grassley has sounded the alarm regarding issues of competition and gaming in MA for nearly a decade.” Similarly, research has long and consistently proven that MA plans inflate diagnoses, contributing to the issue of MA overpayments, that are on monitor to succeed in greater than $1 trillion dollars over the next decade. As the report additionally notes, “this [u]nnecessary federal spending negatively impacts the MA program and the American taxpayer.”

Here, too, findings are nicely documented. The Medicare Payment Advisory Commission (MedPAC), an impartial company that advises Congress on Medicare, estimates CMS pays 20% more for MA enrollees than it pays for comparable folks in Original Medicare (OM), for a distinction of $84 billion in 2025 alone—$40 billion of which could be attributed to coding variations that improve funds to MA plans. These funds circulate from taxpayers, together with beneficiaries who’re then hit twice: Higher MA spending will increase Part B premiums for all enrollees, driving up Part B premiums by about $13 billion annually (equal to roughly $198 per beneficiary).

Reforms Are Urgently Needed

The report’s conclusion underscores the necessity for reform:

“[T]his initial review has revealed how UHG has been able to profit from the way that CMS risk adjusts payments to MAOs. The investigation has also shown that risk adjustment in MA has become a business in itself—by no means should this be the case. MAOs should receive payments that are commensurate to the complexity and acuity of the Medicare beneficiaries that they insure, not their knowledge of coding rules and their ability to find new ways to expand inclusion criteria for diagnoses. Taxpayers and patients deserve accurate and clear-cut risk adjustment policies and processes.”

Although MA was meant to scale back Medicare expenditures by competitors and efficiencies, present structural flaws stop financial savings from accruing. Per particular person, Medicare spending is higher and growing faster for MA beneficiaries than for these with OM, and plan abuses are too typically unchecked. The ensuing overpayments reward insurers with higher income however penalize all beneficiaries by greater Part B premiums and all taxpayers by elevated prices, whereas weakening Medicare’s monetary footing. Absent correction, these impacts will solely deepen.

Medicare Rights urges policymakers to intervene directly, together with by addressing fraud, waste, and abuse inside MA. Coding abuse is nicely documented, and CMS has significant, if underutilized, instruments to deal with it. These commonsense reforms are non-negotiable. More correct MA funds and enhanced insurer accountability are vital to make sure ongoing beneficiary entry to inexpensive, high-quality protection and care.

Read extra about Medicare Advantage historical past, tendencies, and overpayment.