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Medicare Fraud: $48 Billion at a Minimum

Thursday March 3rd, 2011   •   Posted by David Theroux at 5:08pm PST   •  

In an article in Politico, Brett Coughlin reports that the Government Accountability Office (GAO) estimates that at least 10% of all Medicare payments (a minimum of $48 billion) are fraudulent and that the federal Centers for Medicare and Medicaid Services (CMS) are unable even to identify an estimate of the degree of improper payments.

The report, prepared for a House Energy and Commerce Oversight Subcommittee hearing, said “CMS needs a plan with clear measures and benchmarks for reducing Medicare’s risk for improper payments, inefficient payment methods and issues in program management and patient care and safety.”

CMS estimates that $48 billion of estimated Medicare outlays of $509 billion in fiscal 2010 went to improper payments, including fraudulent ones. “However, this improper payment estimate did not include all of the program’s risk since it did not include improper payments in its Part D prescription drug benefit, for which the agency has not yet estimated a total amount,” said Kathleen King, director of GAO’s health care team.

Officials said it’s also much harder to identify how much of the improper payments were caused by fraud, which left some GOP lawmakers at the hearing frustrated.

“If you can’t identify it, you can’t penetrate it down,” subcommittee Chairman Cliff Stearns (R-Fla.) said. He said it is “incomprehensible” that CMS can’t estimate the level of fraud in the program.

Democrats on the panel meanwhile played up provisions in the new health care law and a recently issued proposed rule by CMS that would help bar convicted criminals from enrolling in the program. The new authority allows CMS and law enforcement to focus on providers based on the risk they pose. Other tools include fingerprinting, background checks for these “risky” providers and new requirements to better share data between Medicare and Medicaid about terminations of enrollment in one or the other of the programs.

Risky providers include newly enrolled durable medical equipment dealers and home health providers, said John Spiegel, CMS’s director of Medicare program integrity.

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March 2011