How Insurers Are Gaming the Medicare System
Health Care

How Insurers Are Gaming the Medicare System


Insurance companies that operate Medicare Advantage plans can collect bonus payments from the federal government worth hundreds of millions of dollars, but only for plans that receive top ratings. In order to maintain and maximize those payments, some large insurers have been moving patients from lower-rated to top-rated plans without their knowledge, a tactic known as “crosswalking,” according to a report in The Wall Street Journal.

About 1.45 million members were moved into top-rated plans just this year.

Members say they hardly notice the difference, but crosswalking means a lot to the insurance companies. JPMorgan Chase estimates that Humana alone will earn $600 million this year deploying the technique.

Paul Ginsburg, who serves on the Medicare Payment Advisory Commission, told the Journal that it “is nothing more than gaming of the system.” The budget deal passed last month contains a provision to limit the practice, but it won’t go into effect until 2020 and won’t end it completely. A modified bonus system will continue and companies will still be able to shuffle patients into higher-rated plans to maximize payments, the Journal reports.