Medicare Tops List as Most Wasteful Federal Program, GAO Finds
Medicare accounted for about 40% of wasteful spending in fiscal year 2010, topping a list of 70 federal programs, according to a Government Accountability Office report, American Medical News reports (Fiegl, American Medical News, 8/8).
Officials from CMS, GAO and HHS' Office of Inspector General recently testified at a House Subcommittee on Government Organization, Efficiency and Financial Management hearing to explain the data (Commins, HealthLeaders Media, 7/29).
About $48 billion of the $516 billion in Medicare payments to health care providers in 2010 were improper, according to the report. Medicare's traditional fee-for-service program accounted for about $34.3 billion of the wasteful spending, while the rest was attributed to Medicare Advantage (American Medical News, 8/8).
Kay Daly, director of financial management and assurance at GAO, testified that the estimate was incomplete because it did not account for Medicare prescription drug payments.
Possible Contributing Factors
Daniel Levinson, inspector general of HHS' OIG, said that "some but not all improper payments are the result of fraud." Levinson said improper payments also could result from:
- Unnecessary claims;
- Incorrect coding;
- Eligibility errors; and
- Insufficient documentation.
Officials Look for Solutions
Daly said her office has identified five strategies to reduce fraud, waste and improper payments. They are:
Creating stronger provider enrollment standards and procedures;
- Improving pre-payment reviews;
- Focusing post-payment reviews on vulnerable areas;
- Improving oversight of contractors; and
- Developing a corrective action process to address vulnerabilities (HealthLeaders Media, 7/29).
In addition, Levinson said OIG will review the process used by recovery audit contractors, who identify overpayments and underpayments by Medicare and receive compensation based on the amount recovered by Medicare. Levinson said CMS wants to move away from this "pay-and-chase model" and be more proactive by preventing improper payments (American Medical News, 8/8).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.