Study blames contractors for Medicare fraud

NEWS IN BRIEF — Posted May 30, 2011

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The system Medicare uses to pay for physician services and claims for medical equipment invites fraud and waste, according to a study from the Center for American Progress, a public policy research and advocacy organization.

An estimated $34.3 billion in improper Medicare payments were made in 2010. At the same time, the majority of program integrity funding went to Medicare administrative contractors, the firms that actually paid out for the fraudulent claims. These contractors perform several functions that the study's authors believe are in conflict with one another.

"The government should not allow the same contractors to screen and enroll beneficiaries, and also review their claims," the study said. "The Obama administration is now beginning to rebid conflicting MAC contracts, so the time is ripe to create a new class of truly independent contractors who will review providers and suppliers before they ever submit a single claim."

The study argues that Medicare also should hold contractors accountable for making improper payments. Other recommendations include implementing better integrated claims payment databases and conducting targeted reviews of high-cost patients and high-risk health care professionals.

Note: This item originally appeared at

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