Audit puts big price tag on fraud, abuse losses
June 1, 1998 2 minutes read
Audit puts big price tag on fraud, abuse losses
$20 billion hit adds more fuel to compliance fire
Medicare lost about $20 billion last year to fraud, waste, and error, say government accountants in a recently released FY 1997 Chief Financial Officer's Audit of Medicare operations.
While these inappropriate payments amounted to an estimated 11 cents for every Medicare dollar spent in 1997, it is less than the 14 cents on the dollar reported squandered in 1996.
"We think that our unprecedented war against fraud and other corrective actions against improper payments is having an impact," said Medicare spokesman Chris Peacock.
Not everyone is putting such a positive spin on these numbers, however. The sentiment in both Congress and the Clinton administration is that these losses are still unacceptable. In turn, giving policy-makers added ammunition - and raising the political pressure - for HCFA and the Office of Inspector General's office to crack down even harder on everything from outright fraud to sloppy billing procedures.
Of the $177.4 billion that Medicare paid to doctors, hospitals, laboratories, and other health care providers in 1997, auditors estimate about $20.3 billion was wasted.
That compares with $23.2 billion in overpayments reported for 1996. However, the real number is not known because the results are really statistical estimates based on a sampling of claim forms. Allowing for statistical error, the actual amount of improper payments for 1997 could actually be as high as $28.4 billion or as low as $12.1 billion, notes the report.
Moreover, the auditors were not able to distinguish whether overpayments were due to outright criminal fraud (deliberate gaming of the Medicare coding system to produce overpayment) or honest billing errors.
The big three problem areas identified by the auditors as resulting in improper payments were charging for medically unnecessary treatment, charging for services not covered by Medicare, and lack of proper and complete accompanying documentation for the care supposedly provided.
Major provider groups tagged with receiving the bulk of these improper payments were physicians (29%), hospital inpatient and outpatient services (30%), and home health care agencies (13%).
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content