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Medicare Fraud Cost $11.6B Last Year
By Mark Sherman, Associated Press Writer via Los Angeles Times
November 14, 2003
Fraud and billing errors in the Medicare program cost the government an estimated $11.6 billion last year, a slight improvement over previous years, the agency that runs the program said Friday, November 14.
The error rate -- claims that were medically unnecessary, inadequately documented or improperly coded -- was 5.8 percent, down from 6.3 percent the year before, the Centers for Medicare and Medicaid Services said. The error rate was as high as 13.8 percent in 1996.
But the CMS report was immediately attacked by a Republican senator who asserted it understates the problem and is "not statistically valid."
Sen. Charles Grassley, R-Iowa, said CMS adjusted the results of its annual review to avoid showing a spike in improper payments in Medicare, the government-run health care program for 40 million older and disabled Americans.
"It appears that the 'unadjusted' error rate of close to 10 percent was too high for CMS -- almost 4 percentage points higher than the previous two years," Grassley wrote in a letter to Dara Corrigan, the acting inspector general for the Department of Health and Human Services, which includes CMS.
HHS last year shifted responsibility for determining the error rate from the inspector general to the Medicare agency, which paid AdvanceMed Corp. $5 million to conduct a review. Grassley opposed the change, which he said compromised the review.
Leslie Norwalk, the acting CMS deputy administrator, acknowledged that the error rate initially showed $20 billion in improper payments. But she said there were 6,000 claims examined for which health care providers submitted no information and CMS officials decided, based on prior years, not to count all those as improper payments.
"We felt it would have been misleading not to count what we've done in the past," Norwalk said.
The annual review for the first time included a look at which health care providers had the most questionable claims. Physical therapists accounted for 18.2 percent of the errors, the review found. Internists had 11.3 percent and chiropractors had 11.3 percent of the errors.
Podiatrists, ambulance services and urologists were the providers with the smallest percentages of errors.
"The annual error rate gives us an estimate of how much billing mistakes cost the American taxpayer, and that number is always too high," CMS administrator Tom Scully said.
The agency has no way to determine from its review how large a role fraud played in the improper payments, CMS spokesman Peter Ashkenaz said. The purpose of the review is "how can we use this to better run the program," Ashkenaz said.
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