Hospitals and Insurers Are Getting Rich Off Medical Fraud
Hospitals and insurers are accused of profiting from fraudulent billing practices, particularly within the Medicare Advantage program, by inflating patient risk scores through a scheme known as 'upcoding.' This allows them to collect higher government payments without providing additional care, driving up healthcare costs for taxpayers and employers. The Trump administration and some state governments are taking steps to combat the fraud by proposing payment reforms and stricter billing audits.
- ▪UnitedHealthcare reported record profits in 2026 and over $400 billion in revenue in 2025, largely from federal healthcare programs.
- ▪Medicare Advantage payments are based on patient risk factors, enabling insurers to inflate diagnoses to receive higher reimbursements—a practice known as 'upcoding.'
- ▪The Trump administration has rejected increased Medicare Advantage payments and proposed eliminating insurer-added diagnoses not made during actual patient visits, which could save $7 billion annually.
- ▪States like Indiana, Arkansas, Virginia, and Ohio are enacting laws to audit and prevent fraudulent hospital billing practices.
- ▪The Medicare Advantage program now covers more than half of American seniors, and fraud in the system is estimated to cost tens of billions of dollars each year.
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Hospitals and Insurers Are Getting Rich Off Medical Fraud Stephen Moore 8:30 AM | May 02, 2026 AP Photo/Patrick Sison, File Polls show Americans are angry -- and rightly so -- at accelerating medical bills. Meanwhile, the insurers and hospitals keep raking in record profits. Advertisement googletag.cmd.push(function () { googletag.display("div-gpt-300x250_4"); //googletag.pubads().refresh([gptAdSlot["div-gpt-300x250_4"]]) }); UnitedHealthcare just reported jumbo profits so far in 2026, and in 2025 they recorded revenues of more than $400 billion. They are raking in profits from the $1.9 trillion in federal healthcare programs. Two of the largest "nonprofit" hospital chains, Kaiser Permanente and HCA Healthcare, recorded nearly $200 billion in assets at the end 2024. As Rep.
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