Medicare, Medicaid spent $54 billion too much in 2009, White House says

OMB figures show an increase over 2008, some of which HHS attributes to stricter review.

By Chris Silva — Posted Dec. 2, 2009

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Improper payments for health care made up a large portion of the $98 billion the federal government spent inappropriately in fiscal 2009. This total was an increase of $26 billion over the previous year, according to a report issued by the White House Office of Management and Budget.

The Nov. 17 report concluded that Medicare fee for service improperly spent $24 billion in fiscal 2009, a rate equivalent to 7.8% of total outlays, and Medicaid improperly spent $18 billion, a rate of 9.6%. Medicare Advantage improperly spent $12 billion in 2009, a rate of 15.4% of total outlays on the private plans.

The Medicare fee-for-service error rate was just 3.6% in 2008.

The Dept. of Health and Human Services attributed some of the stark increase in improper payments to a new, more rigorous method of calculating error rates, in keeping with President Obama's stated commitment to reducing fraud and waste.

"Through a more stringent review of Medicare claims, we've been able to establish a more complete accounting of errors, enabling the Centers for Medicare & Medicaid Services to take more actionable steps to further reduce the error rate and identify abusive or potentially fraudulent actions before they become problems," said HHS Secretary Kathleen Sebelius.

Sebelius also credited a joint fraud and abuse task force formed earlier this year with the Dept. of Justice -- the Health Care Fraud Prevention and Enforcement Action Team -- with improving oversight of Medicare funds.

Some payments for health services are labeled improper because they are deemed to be medically unnecessary or because they lack proper documentation. CMS said it is taking further steps to ensure that physicians submit all required clinical and medical documents to support a claim, that signatures on medical documents are legible and that a claims history no longer can be used to fill in missing treatment documentation. The agency said it also is using data from electronic records to detect vulnerabilities in areas at high risk for fraud, abuse and waste -- such as durable medical equipment and home health services.

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