MEDICARE FRAUD: $20 Billion Overpaid In 1997, Says Audit
"Medicare lost about $20 billion last year to fraud, waste and simple error," according to an audit to be presented to Congress today by the Department of Health and Human Services' inspector general. The AP/Arkansas Democrat-Gazette reports that the estimated $20.3 billion in waste came on $177.4 billion in total outlays, or "11 cents squandered on every dollar spent in 1997." In arriving at the figures, the inspector general used statistical sampling by reviewing a "representative sample of bills" from doctors, hospitals, home-care agencies and laboratories. Payouts to HMOs were not considered. "The audit doesn't distinguish" what percentage of waste was caused by billing error, criminal fraud or "more subtle manipulation." In most cases, bills were deemed incorrect "because they charged for medically unnecessary treatment or services not covered by Medicare or because documentation of care supposedly provided was missing," the AP/Arkansas Democrat-Gazette reports. Due to statistical sampling error, the auditor notes that the overall figure may be off by as much as $8 billion either way.
They Call This Improvement?
Medicare officials note that the 1997 numbers compare favorably with those of 1996, in which $23.2 billion was wasted, or 14 cents for every dollar paid out by Medicare. They are quick to attribute the change to their "aggressive action against Medicare waste in recent years." Congress earmarked an additional $104 million in 1997 for fraud and waste investigation, leading to the recovery of almost $1 billion in improper payments. Chris Peacock, a Medicare spokesperson, said, "We think that our unprecedented war against fraud and other corrective actions against improper payments are having an impact." Still, many legislators are dissatisfied with the results. "The taxpayers are footing the bills," said Sen. Chuck Grassley (R-IA), chair of the Senate Special Committee on Aging (4/24).