The federal government has started penalizing Medicare Advantage insurers that have one common, glaring problem: Faulty technology systems are leading to people paying more for care and coverage than they should be.
The Centers for Medicare and Medicaid Services fined three different Medicare Advantage plans this month, each one getting dinged differently for the way they overcharged their members. The fines are minuscule for the insurance companies — roughly equivalent to some pennies under a couch cushion — but they could serve as warnings for companies to clean up their compliance and IT infrastructure before regulators knock on their doors again.
“Just the knowledge that CMS will be back one day and that you better have this fixed, I think, does have a sentinel effect,” said Philip Legendy, an attorney at Ballard Spahr who represents Medicare Advantage plans. “And if you’re doing it over and over, it could be viewed as intentional.”