New Govt Report Says Medicare Paid $47 Billion in Suspect Claims

eduTrax News Service - Nov. 23, 2009.

The government paid more than $47 billion in questionable Medicare claims including medical treatment showing little relation to a patient's condition, wasting taxpayer dollars at a rate nearly three times the previous year, according to the Associated Press (AP). The AP reports that excerpts from a new federal report show a dramatic increase in improper payments in the Medicare program. This report comes on the heels of a CMS report issued just a week ago showing only about half that amount ($24.1 billion) in erroneous payments for the same period. This newest report shows almost triple the error rate reported by the Bush Administration.

Despite the huge increase in reported errors, it is not clear that errors and/or fraud are actually getting worse. Some of the difference could be due to semantics -- "payments in error" (known overpayments) versus "suspect claims" (claims that may or may not be improperly paid). Officially, according to the AP, much of the increase is attributed to the change in the methodology employed by CMS, which now imposes stricter documentation requirements and consequently counts more claims as "improper" payments. The change in methodology is part of a data-collection effort ordered by President Barack Obama. The President is expected to announce new initiatives this coming week to promote "honest budgeting" and accurate statistics, and help crack down on health care fraud, which has become an important priority for the new administration.

The AP story reports that government officials say they intend to increase training and outreach among Medicare providers to reduce documentation errors. Also, proposed health care overhaul legislation could increase background checks on Medicare claimaints and impose stiffer penalties for false claims.

Other findings in the report, according to the AP:

• In the Medicaid program: 9.6% or more than $18 Billion are suspected to be improper payments.
• HHS will use 12.4% as the baseline in improper Medicare payments, and will set targets of reducing that number to 9.5%, 8.5%, and 8%, respectively, for fiscal years 2010 through 2012.

Also, AP reports that new records released this past week show that for the past three years, CMS ingnored internal watchdog warnings about millions of dollars of fraud in several Medicare programs -- the agency reportedly received roughly 30 warnings from internal auditors, yet did not respond to half of them, despite repeated warnings in writing from the auditors.

Source: The Associated Press.