Senate Report Exposes Medicare Advantage Gaming

Sen. Chuck Grassley (R-Iowa), chair of the Senate Judiciary Committee, released a majority staff report on UnitedHealth Group’s (UHG) efforts to maximize Medicare Advantage (MA) profits by “turning risk adjustment into its own business and siphoning off taxpayer money in breach of the program’s original intent.”

The nation’s largest Medicare Advantage Organization (MAO), UHG has been under scrutiny in recent years. In 2024, investigative activity and reporting—namely, from the Department of Health and Human Services Office of the Inspector General (HHS OIG), The Wall Street Journal, and STAT News—revealed apparent UHG coding abuses, spurring Sen. Grassley to request details from the insurer about their billing practices.

UHG provided Sen. Grassley with over 50,000 pages of documents, including internal training materials, policies, software documentation, and audit tools.

In response, UHG provided Sen. Grassley with over 50,000 pages of documents, including internal training materials, policies, software documentation, and audit tools. Staff review of those records found that “UHG has turned risk adjustment into a major profit centered strategy.” The report out this week describes how the company uses “aggressive strategies” to maximize risk adjustment scores and capture “higher payments from the Centers for Medicare and Medicaid Services (CMS) than any of its peers.” It explains that “UHG appears to be able to leverage its size, degree of vertical integration, and data analytic capabilities to stay ahead of CMS’s efforts to counteract unnecessary spending related to coding intensity.”

MA Payments and Coding Abuses

The Centers for Medicare & Medicaid Services (CMS) pays Medicare Advantage (MA) plans a set amount for each enrollee, increasing payments for sicker enrollees. This is called risk adjustment, and it is an important guardrail to ensure that all people with Medicare have access to MA plans; without it, plans would have reasons to avoid covering people in worse health.

The promise of higher payments can incentivize MA organizations to make their enrollees look sicker than they really are.

But there is a flip side: the promise of higher payments can incentivize MA organizations to make their enrollees look sicker than they really are. Insurers may meticulously document patients’ conditions to produce a higher risk score that will in turn produce higher payments, which is known as “coding intensity.” They may also engage in “upcoding,” the fraudulent practice of recording paper-only diagnoses without actually providing more care. 

Coding exploitation is not a new phenomenon. The report states that “Senator Grassley has sounded the alarm regarding issues of competition and gaming in MA for nearly a decade.” Similarly, research has long and consistently shown that MA plans inflate diagnoses, contributing to the problem of MA overpayments, which are on track to reach more than $1 trillion dollars over the next decade. As the report also notes, “this [u]nnecessary federal spending negatively impacts the MA program and the American taxpayer.”

Here, too, findings are well documented. The Medicare Payment Advisory Commission (MedPAC), an independent agency that advises Congress on Medicare, estimates CMS pays 20% more for MA enrollees than it pays for similar people in Original Medicare (OM), for a difference of $84 billion in 2025 alone—$40 billion of which can be attributed to coding differences that increase payments to MA plans. These payments flow from taxpayers, including beneficiaries who are then hit twice: Higher MA spending increases Part B premiums for all enrollees, driving up Part B premiums by about $13 billion each year (equivalent to roughly $198 per beneficiary).

Reforms Are Urgently Needed

The report’s conclusion underscores the need for reform:

“[T]his initial review has revealed how UHG has been able to profit from the way that CMS risk adjusts payments to MAOs. The investigation has also shown that risk adjustment in MA has become a business in itself—by no means should this be the case. MAOs should receive payments that are commensurate to the complexity and acuity of the Medicare beneficiaries that they insure, not their knowledge of coding rules and their ability to find new ways to expand inclusion criteria for diagnoses. Taxpayers and patients deserve accurate and clear-cut risk adjustment policies and processes.”

Although MA was intended to reduce Medicare expenditures through competition and efficiencies, current structural flaws prevent savings from accruing. Per person, Medicare spending is higher and growing faster for MA beneficiaries than for those with OM, and plan abuses are too often unchecked. The resulting overpayments reward insurers with greater profits but penalize all beneficiaries through higher Part B premiums and all taxpayers through increased costs, while weakening Medicare’s financial footing. Absent correction, these impacts will only deepen.

Coding abuse is well documented, and CMS has meaningful, if underutilized, tools to address it.

Medicare Rights urges policymakers to intervene without delay, including by addressing fraud, waste, and abuse within MA. Coding abuse is well documented, and CMS has meaningful, if underutilized, tools to address it. These commonsense reforms are non-negotiable. More accurate MA payments and enhanced insurer accountability are necessary to ensure ongoing beneficiary access to affordable, high-quality coverage and care.

Read more about Medicare Advantage history, trends, and overpayment.