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Medicare Fees Reports Blasts Insurers
The Indianapolis Star
November 8, 2007
WellPoint, UnitedHealth Group, Humana and other providers of drug benefits for the Medicare program should have been required to refund $4.4 billion in overpayments faster, according to a government report.
Medicare, the health plan for the elderly and disabled, left insurers free to use the money because it didn't collect interim repayments, Health and Human Services Inspector General Daniel R. Levinson said in a report released Tuesday. The overpayments were for 2006.
The prescription benefit will cost taxpayers $50 billion in 2007, and 10 companies account for 80 percent of the 24 million participants in the drug plans. The biggest providers are UnitedHealth of Minnetonka, Minn.; Humana of Louisville, Ky.; and Indianapolis-based WellPoint. Of the $4.4 billion, UnitedHealth owes Medicare $2 billion, Humana $460 million, and WellPoint $210 million.
Medicare has "no mechanism in place to identify situations in which prospective payments differ significantly from sponsors' actual costs or to adjust prospective payments accordingly to avoid large discrepancies at the end of the year," Levinson said in the report.
The companies that owe refunds are getting "multibillion-dollar, zero-interest loans from Medicare," said Rep. Pete Stark, D-Calif., chairman of the House Ways and Means health subcommittee. He is leading efforts to scale back Medicare's reliance on private insurers.
In a written response attached to Levinson's report, Kerry Weems, Medicare's acting administrator, said the 2006 overpayments are a beneficial consequence of drugs costing less than estimated.
Future estimated payments are likely to be more accurate based on the 2006 experience, and existing rules should stand, he said.
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