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News
Federal auditors say Humana and UnitedHealthcare overbilled Medicare by nearly $180 million in 2020–2021 by exaggerating how sick their members were. The HHS Office of Inspector General found that the vast majority of sampled diagnoses lacked supporting medical records. Both insurers are pushing back, calling the audit methodology flawed and declining to return the funds.
Federal auditors are turning up the heat on two of the biggest Medicare Advantage (MA) insurers. New HHS Office of Inspector General (OIG) audits found that HumanaChoice and UnitedHealthcare of Wisconsin submitted diagnosis codes to Medicare that weren't backed by medical records — a practice known as "upcoding" — generating nearly $180 million in improper reimbursements over 2020 and 2021.
In the MA program, the government pays private insurers more for sicker members, creating a financial incentive to exaggerate health needs. The OIG focused on 11 high-risk diagnosis categories — including acute stroke, heart attack, sepsis, and various cancers. For HumanaChoice, 178 of 220 sampled cases lacked documentation, extrapolating to ~$131 million in overpayments. For UnitedHealthcare of Wisconsin, 183 of 250 cases were unsupported, amounting to ~$47 million. Both insurers rejected the findings, called the methodology flawed, and said they have no plans to return the money.
By the Numbers
Why it matters: With roughly 15 million seniors covered by these two insurers alone, upcoding inflates federal spending and undermines the integrity of the MA program. The OIG's findings add to a growing body of evidence that financial incentives in MA are driving insurers to game the system — and regulators are under increasing pressure to act.
