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

(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.

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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.