WASHINGTON — The U.S. government overpaid private insurance companies administering Medicare Advantage plans by as much as $3.1 billion in 2010, according to a new report from the Government Accountability Office (GAO).

About a quarter of all Medicare beneficiaries are enrolled in Medicare Advantage plans, and the Centers for Medicare and Medicaid Services (CMS) paid about $114 billion to the plans in 2010.

Democrats have criticized CMS for paying Medicare Advantage plans too much in comparison with traditional fee-for-service Medicare plans, and the Affordable Care Act cut payments to Medicare Advantage by more than $100 billion over 10 years.

CMS determines how much it pays Medicare Advantage plans and traditional fee-for-service providers by calculating a risk score for each enrolled beneficiary. To calculate the score, CMS determines how much that individual’s healthcare costs are expected to be relative to the entire Medicare fee-for-service population. CMS generally pays more money for beneficiaries in poor health than for those in good health.

Risk scores should be the same for beneficiaries with the same health conditions, age, and other characteristics, GAO said. However, its investigation found that’s not the case.

CMS gets information on the medical diagnoses of fee-for-service patients by analyzing the claims that fee-for-service providers submit […]