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GAO finds Medicare plans paid too much

| Tuesday, March 5, 2013, 7:48 p.m.

WASHINGTON — Health insurers that offer private plans in the Medicare program for the elderly and disabled were overpaid by as much as $5.1 billion during the past three years, government auditors said.

The report, from the Government Accountability Office, the investigative arm of Congress, was compiled as insurers are fighting a proposed 2.2 percent cut in a rate used to determine their payments in the Medicare Advantage program. About a quarter of Medicare's 49 million beneficiaries sign up for Advantage plans, in which their care is covered by insurers led by UnitedHealth Group Inc. instead of the government.

The plans were paid about $135 billion in 2012, according to the GAO. Payments will fall by about $11 billion in 2014 if the proposed cut is enacted, UnitedHealth said in a recent letter to Medicare's acting administrator, Marilyn Tavenner.

“The cuts result in higher costs for millions of beneficiaries, diminish choice for Medicare enrollees, compromise the viability of the Medicare Advantage program and undercut Medicare Advantage's ability to deliver better quality at lower costs,” John Larson, chief executive officer of UnitedHealth's Medicare and Retirement unit, wrote in the letter.

A spokesman for UnitedHealth, Matt Stearns, said in an email that the company wouldn't comment on the GAO report.

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