Potential Medicare Savings on Select Services Subject to Fraud, Waste & Abuse
Traditional Medicare could have saved $7 billion from 2019-2023 on four services, which the HHS Office of the Inspector General identified as subject to fraud, waste, and abuse—skin substitutes, catheters, genetic testing, and off-the-shelf orthotic braces—if its utilization rates mirrored those of Medicare Advantage (MA).
This analysis, conducted by the Berkeley Research Group (BRG), is illustrative of selected services with demonstrated prior fraud, waste, and abuse. BRG used Traditional Medicare fee-for-service claims and MA encounter data records to calculate utilization rates for the four services and then estimate potential savings if Traditional Medicare utilization mirrored MA utilization rates for those services.
MA plans employ fraud detection strategies and medical management tools to identify fraud, waste, and abuse. The findings of this study show how MA can protect both beneficiaries and the Medicare program from unnecessary spending, and underscore how wider adoption of these strategies could lead to significant beneficiary and taxpayer savings.
Related Public Policy Research
Medicare Advantage Growth Is Associated with Lower Total Medicare Spending
In the last decade, growth in Medicare program spending has been slower than projected, spurring questions about factors that contribute to this trend. This analysis suggests that Medicare Advantage (MA) enrollment, which has grown significantly in the same time frame, may be one such factor.
Understanding the Medicare Advantage Program
Medicare Advantage (MA) plans provide enrollees a valuable alternative to Medicare fee-for-service (FFS) by offering out-of-pocket cost protections, additional benefits, and innovative strategies for care management and coordination.