Fraud Risks in an Evolving Medicare Program
Medicare spending now tops $1 trillion a year, making the fight against fraud, waste, and abuse a top federal priority. Beyond driving up costs, these practices can reduce the quality of care and, in some cases, cause direct harm to people who rely on Medicare.
Many federal laws and oversight mechanisms were built for traditional, fee-for-service coverage. But the landscape has changed. Today, more than half of the program’s 69 million beneficiaries are enrolled in Medicare Advantage (MA)—private health plans that manage care on the program’s behalf. This shift has created new risks for beneficiaries, taxpayers, providers, and health plans alike.
Susan Joy
Managing Director
Many of the risks associated with traditional Medicare are present in Medicare Advantage; but the payment and delivery model of Medicare Advantage also presents unique risks to Medicare and its beneficiaries that call for targeted analysis and action by policymakers and oversight agencies.
Susan Joy
Managing Director
AIR's Research and Publications
To better understand these challenges, AIR researchers examined fraud and abuse risks as beneficiaries move from traditional coverage to private managed care plans. Drawing on interviews with key stakeholders and comprehensive reviews of existing research and policy documents, AIR produced three reports.
- The first report, Medicare Fraud, Waste, and Abuse Historical Context: Risks, Mitigation Strategies, and Future Directions, provides a historical overview of program integrity policies and operations.
- The second report, Fraud, Waste, and Abuse Risks in Medicare Advantage, focuses on risks specific to MA plans, including:
- Manipulating risk adjustment to receive higher payments;
- Misleading or aggressive marketing;
- Inadequate provider networks; and
- Inappropriate use of utilization management.
- The third report, Medicare Advantage Fraud, Waste, and Abuse Policy Options, discusses policy options to address some of the major risks for fraud, waste, and abuse in Medicare Advantage.
Together, these reports highlight where current safeguards fall short and where new approaches may be needed to protect beneficiaries and public funds in a changing program landscape. The insights can also inform Medicaid and Marketplace oversight, as plans and providers often operate across multiple programs that face similar fraud and abuse vulnerabilities.
Arnold Ventures provided support for this work.
