'Our Seniors Deserve Better': Jayapal Demands End of All Medicare Privatization Schemes

Rep. Pramila Jayapal on Monday called for an end to all Medicare privatization schemes following a Washington Post report spotlighting how Medicare Advantage plans are distorting patients' medical records to overbill the federal government and boost their profits.

"Medicare Advantage plans regularly deny needed care to seniors and frequently create fake illnesses to defraud the government," Jayapal (D-Wash.), the chair of the Congressional Progressive Caucus, wrote in a social media post.

"This is a clear-cut example of why we must end Medicare privatization programs."

"This is a clear-cut example of why we must end Medicare privatization programs," added Jayapal, the lead sponsor of the Medicare for All Act in the House. "Our seniors deserve better."

Privately run Medicare Advantage (MA) plans have long been notorious for the practice of upcoding, whereby large insurers and other MA firms make enrollees appear sicker than they actually are in order to reap larger payments from the federal government--even as they refuse to provide necessary care for tens of thousands of patients each year.

The Post on Sunday detailed the case of Kathy Ormsby, a former employee of the Palo Alto Medical Foundation who blew the whistle on the firm's efforts--alongside its parent affiliate Sutter Health--to pressure doctors into adding false diagnoses to patients' medical histories.

"The point of larding the medical records with outdated and irrelevant diagnoses such as cancer and stroke--often without the knowledge of the patients themselves--was not providing better care, according to a lawsuit from the Justice Department, which investigated a whistleblower complaint Ormsby filed," the Post noted. "It was to make patients appear sicker than they were."

"The maneuver translated into millions of dollars in inflated bills to the federal Medicare Advantage insurance program, the government alleged in its false-claims lawsuit filed in U.S. District Court in California," the newspaper added. "In a sample of hundreds of cases Ormsby audited, the government's lawsuit said, she discovered 90% of diagnoses for cancer were invalid, as were 96% for stroke and 66% for fractures."

Despite growing mountains of evidence documenting large-scale fraud and other abuses committed by private MA organizations, the Biden administration announced in April that MA insurers will get one of the largest payment increases in the program's history in 2023.

"Medicare Advantage insurers such as United Healthcare, Anthem, and CVS/Aetna are celebrating record profits in the tens of billions of dollars," Dr. Susan Rogers, president of Physicians for a National Healthcare Program, toldThe Lever last week. "Their business plan is simple: inflate their Medicare payments by making seniors look sicker than they are, and then pocket more of those Medicare dollars by ruthlessly denying seniors' care."

Meanwhile, the Health and Human Services Department has decided not to reverse its enactment of one of the largest premium increases in the history of traditional Medicare this year, locking in higher costs for tens of millions of seniors just ahead of the pivotal midterm elections.

The administration is also pushing ahead with a pilot program known as ACO REACH, which critics have described as "Medicare Advantage on steroids."

If the pilot--which originated under the Trump administration--isn't halted, physicians and healthcare advocates warn that it could result in the total privatization of traditional Medicare in a matter of years.

"We must immediately end Medicare privatization programs like ACO REACH," Jayapal argued in April. "There's no excuse for allowing the same Medicare Advantage organizations to now administer 'care' for traditional Medicare beneficiaries."