Feds expect to collect $4.7B in insurance fraud penalties

WASHINGTON (AP) — The Biden administration estimated Monday that it could collect as much as $4.7 billion from insurance companies with newer and tougher penalties for submitting improper charges on the taxpayers' tab for Medicare Advantage care.

Federal watchdogs have been sounding the alarm for years about questionable charges on the government's private version of the Medicare program, with investigators raising the possibility that insurance companies may be bilking taxpayers of billions of dollars every year by claiming members are sicker than they really are to receive inflated payments.

The Department of Health and Human Services said it will begin collecting payments from insurers when an audit turns up that they charged for diagnoses that are not reflected in the patient's medical records. The government has not sought refunds for those payments in over a decade, the agency said.

“Today, we are taking some long overdue steps to move us in the direction of accountability,” HHS Secretary Xavier Becerra said Monday during a phone call with reporters.

The penalties are expected to return $4.7 billion over the next decade, the agency estimated.

The questionable payments are submitted through Medicare Advantage, a booming program that nearly half of the 60 million people enrolled in Medicare sign up for. Medicare Advantage is different from traditional Medicare, with private companies offering plans that are reimbursed by the government for care. The government spent $900 billion last year overall on Medicare.

With the rise in popularity has come growing concern that insurers are ripping off taxpayers by overstating how sick a patient is to unlock higher reimbursements from the government. The HHS Office of the Inspector General raised red flags about $6.7 billion...