Annual excess payments to private insurers under Medicare Advantage total $7 billion, driven by inflated coding practices, a congressional report shows.
A Congressional Joint Economic Committee report estimates Medicare Advantage overpayments at $7 billion annually, rising due to coding practices that inflate diagnoses for higher reimbursements. The figure equates to $212 per enrollee across 33 million beneficiaries, funding supplemental benefits and insurer margins.
The $7 billion overpayment represents a fraction of the $33 billion in extra payments tied to coding intensity, primarily benefiting insurers like UnitedHealth and Humana. Medicare Advantage now covers over half of all Medicare beneficiaries, amplifying scrutiny from CMS and DOJ investigations.
Publicly traded carriers, including Humana and UnitedHealth, rank among the largest U.S. healthcare companies, with margins partly supported by these payments. Reform pressure mounts as regulators tighten audits and enforcement.