final version
final version

Medicare Wants To Claw Back $4.7 Billion From Private Health Insurers

The US Medicare agency will seek about $4.7 billion over 10 years in clawback payments from private insurers that manage its programs under a long-awaited rule finalized Monday, a blow to the industry that sets up a possible court fight.

The rule, which governs audits of Medicare Advantage insurers by the Centers for Medicare and Medicaid Services, is stricter than the industry had lobbied for. It finalized a 2018 proposal for auditing the private plans that administer programs for the agency, a move intended to recover excessive payments based on exaggerated claims of patient illness.

“Today we are taking some long overdue steps to move us in a direction of accountability,” Health and Human Services Secretary Xavier Becerra said on a call with reporters.

Private Medicare health plans are a growing source of profit for insurers like Humana Inc., UnitedHealth Group Inc. and CVS Health Corp. Managed-care companies fiercely opposed the 2018 proposal, and the final version contains few concessions to industry. If it survives court challenges, the policy could increase the amount Medicare insurers will eventually have to repay the government over what officials say isn’t backed up by patients’ medical records.

Humana fell as much as 3.5% in extended trading after US markets closed, while United Health declined as much as 2.3%. CVS lost up to 2% while Centene Corp. and Elevance Health Inc. fell less than 1%.

Insurers in Medicare Advantage get paid more for enrolling sick patients, and the audits are meant to check those payments against medical records to ensure that they’re accurate.

CMS will limit the impact of its reviews on insurers’ payments for the earliest years under audit — from 2011 to 2017 — officials said Monday. The agency plans to look at certain insurer contracts for signs of diagnostic errors, and

Read the rest