Private insurance companies provided hundreds of thousands of suspicious (and sometimes downright false) diagnoses in order to siphon off extra taxpayer money from the federal government’s Medicare Advantage program from 2018 and 2021, according to a new report from the Wall Street Journal.

The study considered “billions” of Medicare records from that period and found diagnoses that ranged from “questionable” to “outright wrong.” It discovered that patients were diagnosed with life-threatening diseases like AIDS, only for the patients to attend no follow up appointments. Sometimes they were diagnosed with diseases they could not physically have, and often times they were being diagnosed without their knowledge or their doctor’s knowledge.

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In one example of malfeasance, a patient named Gloria Lee was contacted multiple times by representatives from her Medicare insurer asking whether a nurse could come to her house and perform a quick check up, promising her a $50 gift card. On one of these occasions, a nurse diagnosed him with “diabetic cataracts.”

Because Medicare gives more funds for sicker patients, Gloria Lee’s insurer, UnitedHealth Group, got a bump of $2,700 a year.

Later, Lee’s doctor confirmed that she did not in fact have diabetes, nor any of its symptoms such as cloudy vision.

Medicare Advantage, program with an annual budget of $450 billion, currently covers half of the 67 million “seniors and disabled people” receiving Medicare benefits. It was conceived under the idea that private insurance companies could more efficiently provide coverage on behalf of Medicare.

It was supposed to save Medicare money, but instead the private companies ended up adding tens of billions of dollars to the program—partially because they can add diagnoses to what their doctors have claimed. This was intended to add oversight to doctors’ neglect, but instead seems to have become a source of corruption.

According to the study, Medicare paid out $50 billion for diagnoses made by insurance companies from 2018 to the end of 2021.

UnitedHealth diagnosed 631 patients with diabetic cataracts per 10,000 beneficiaries, while Medicare diagnosed just 43. Medicare Advantage insurers received over $700 million from 2019 to 2021 to cover diabetic cataracts. Several other diseases were diagnosed at higher rates by insurers than by Medicare officials, as can be seen below.

The Journal determined many of the cases were manifestly false, as the patients had already been cured: 66,000 patients under the Medicare Advantage program were diagnosed with diabetic cataracts, despite the fact that they already had cataract surgery. An additional 36,000 cataract patients did not receive any relevant medical services or prescription drugs.

“It’s anatomically impossible,” said eye specialist Dr. Hogan Knox of the University of Alabama at Birmingham. “Once a lens is removed, the cataract never comes back.”

Similar stories occurred when they looked at records of people diagnosed with AIDS or HIV, who did not begin prescriptions for drugs that are absolutely necessary for people with the conditions, like antiretroviral drugs. People were also diagnosed with hepatitis C after already receiving treatment for it.

Further, because of a provision that adds protections to private insurers in Medicare Advantage from having to cover especially sick patients, the program has cost Medicare an additional $591 billion over the last 18 years, according to MedPAC.

Shane Devine is a writer covering politics and business for VT and a regular guest on The Unusual Suspects. Follow Shane’s work here.

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