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Watchdog: Traditional Medicare paid $125 billion improperly over three years

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(Bloomberg) — The traditional Medicare fee-for-service program sent out more than $125 billion in improper payments over three years for a plan that insures hospital and medical services for the elderly, including home health care, possibly triggering a congressional review.

Improper payments from the traditional Medicare program exceeded 10 percent of total payments from fiscal 2013 through 2015, according to a report released Thursday by the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG). After three consecutive years over the limit, the program is required by law to submit plans to Congress for re-authorization or returning to compliance, HHS OIG said.

See also: GAO: ‘Traditional Medicare’ is private, too

HHS to address earlier recommendations for reducing the rate and bringing it under the compliance threshold, according to the report.

An earlier study by the U.S. Government Accountability Office (GAO), the investigative arm of Congress, recently found that the Medicare Advantage program made about $14 billion in improper payments to insurers in fiscal 2013 that the companies didn’t return.

Coding, paperwork

Improper payments are most often made in response to insufficient coding or paperwork, or when medical need for a service hasn’t been established, and the payments typically aren’t fraudulent, Patrick Conway, chief medical officer for the Centers for Medicare & Medicaid Services (CMS), said in a blog post.

The improper payment rate in the traditional Medicare fee-for-service program was 10.1 percent in 2013, or about $36 billion; 12.7 percent in 2014, or $45.8 billion; and 12.1 percent in 2015, or $43.3 billion, according to Don White, a spokesman for HHS OIG, in an e-mail. Insufficient documentation for home health claims was one of the primary causes of improper payments, according to the report.

Conway said he was pleased to see that the traditional Medicare program’s improper payment rate fell between 2014 and 2015. The agency is taking steps to encourage states and organizations to help reduce improper payments, he said.

The report was based on an audit, conducted by Ernst & Young LLP, which the inspector general’s office hired to study payments in several HHS programs. HHS “met many requirements but did not fully comply” with the regulations in 2015, according to a letter from the auditor to HHS OIG included in the report.

“HHS has taken, and continues to take, a number of actions to address root causes” of improper payments, Ellen Murray, HHS assistant secretary for financial resources, said in a letter to HHS Inspector General Daniel Levinson dated May 9.

See also:

Insurers gaming Medicare might cost Washington billions a year

12 Medicare facts you need to know for the current open enrollment period


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