Medicare ranks plans on a five-star quality scale and provides financial bonuses to providers of top-ranked plans.
When a Medicare Advantage plan is not in line to receive a financial bonus, health insurance companies will merge those patients into plans with higher scores, which preserves the bonuses. Using this tactic, health insurance companies are able to boost the ratings of Medicare Advantage plans without actually improving on quality measures.
The tactic, “crosswalking”, adds millions of dollars in federal payments to the companies that sell Medicare Advantage policies. For Humana, the shift is estimated to be worth nearly $600 million in revenue this year.
The maneuver “is nothing more than gaming of the system,” says Paul Ginsburg, a professor at the University of Southern California and member of the Medicare Payment Advisory Commission, a federal watchdog agency that has been critical of the strategy, as reported in the Wall Street Journal.
Learn more about gaming the system in this in-depth look in The Wall Street Journal.