Medicare’s Latest Wrongful Payments—$6.7 Billion
Policy + Politics

Medicare’s Latest Wrongful Payments—$6.7 Billion

The Fiscal Times

Every year, the government doles out tens of billions of dollars in improper payments—with a significant portion coming from Medicare, the government’s sprawling health care program.

Medicare has long struggled with payment issues—losing about $50 billion in improper payment issues a year, according to the Health And Human Services internal auditor.

Related: How Medicare Wastes $50 Billion a Year

The latest example from a report released today by HHS’s IG that shows the program paid more than $6.7 billion to doctors for health care visits in 2010 that were listed as improper or erroneous. That’s 21 percent of the program’s total budget for doctor visits, the auditors said.

During the review, the auditors found that nearly half of the claims were improperly billed and nearly a quarter lacked documentation. Most of the physicians had billed at a more expensive rate than what the service they delivered was worth, though the auditors said some had under-billed.

The report dovetails with another 2010 report, which found that 1,669 doctors had repeatedly billed Medicare for the two highest-paying codes. USA Today first noted that 56 percent of claims for these physicians were incorrect—almost all of them were “up-coded in the provider’s favor” so they could get paid more through the federal program. Those doctors alone resulted in $26 million improper payments in 2010.

The IG has recommended that the Centers for Medicare and Medicaid Services began routinely reviewing the highest billing physicians—but CMS responded, saying it “isn’t cost effective to do so,” NPR reported.

Related: Medicare by the Numbers 

The traditional fee-for-service program lost $36 billion, and Medicare Advantage lost $11.8 billion last year, HHS IG official Gloria Jarmon, told the House Ways and Means Subcommittee on Health earlier this month.

Sylvia Mathews Burwell, President Obama’s nominee to replace former HHS Secretary Kathleen Sebelius, told a congressional committee last month that, if confirmed, one of her top priorities would be to weed out fraud and reduce improper payments.

"As we all know, the numbers are very large in Medicare, so it is a place that we need to focus deeply," Burwell said.

The issue of Medicare payments was forced into the spotlight in March when the government released physician payment data for the first time ever.

The data has drawn scrutiny around the program and how it pays its doctors. A new Reuters analysis published Thursday reveals that Medicare paid three doctors a total of $1.4 million in 2012 for administrating nearly 24,000 drug tests on just 145 patients.

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