Newly released government records reveal that Federal health officials were advised in 2009 that a formula used to pay private Medicare plans triggered widespread billing errors and overcharges that have since wasted billions of tax dollars.
Medicare Advantage plans that are privately operated, offer an alternative to standard Medicare, which pays doctors for each service they render. Under Medicare Advantage, the federal government pays the private health plans a set monthly fee for each patient based on a formula known as a risk score, which is supposed to measure the state of their health. Sicker patients merit higher rates than those in good health.
The program appears to work and approximately 16 million have signed up.