Advocacy Group Urges HHS Secretary to Reduce Medicare Waste to Bolster the Budget

Washington, D.C. – Today, the Council for Medicare Integrity (CMI) sent a letter to Department of Health & Human Services (HHS) Secretary Alex Azar asking for expanded efforts to reduce improper billing within Medicare to decrease the need for planned program cuts.

The letter praises the Secretary’s past successes with compliance efforts and his commitment to standards of excellence in government management while urging the application of those important ideals to bolster program integrity efforts that protect Medicare resources.

“Today, there are so many financial challenges facing the Medicare program – rising healthcare costs, expanding beneficiary populations, fraud within the program and wasteful spending due to provider overbilling. However, the Centers for Medicare & Medicaid Services (CMS) currently have the tools at their disposal to take one of those big problems right off the table by clamping down on rampant misbilling within the program, “said Kristin Walter, spokesperson for the Council.

Currently, the Medicare Fee for Service (FFS) program permits only 0.5 percent of provider claims to be reviewed for accuracy, allowing 99.5 percent of claims to be approved and paid without ensuring they appropriately reflect the care that was provided. This lack of oversight has caused the program to unnecessarily spend more than $200 billion over the past 5 years alone.

“In comparison, private insurers require up to 100 percent of provider claims to be reviewed for billing accuracy both before and after they are paid. The lack of billing oversight in Medicare would never be allowed to occur in the private sector, where a healthy bottom line determines the policy,” said Walter.

In the letter, CMI asks the HHS Secretary to expedite additional efficiencies within the Medicare audit scenario review process to get the program back on track reviewing issues previously approved by the Centers for Medicare & Medicaid Services (CMS). The agency previously approved more than 400 error prone Medicare audit scenarios for review. Currently, fewer than 30 scenarios are permitted to be reviewed.

CMI also makes several recommendations to the Secretary that would reduce spending and help protect Medicare’s future solvency, including taking steps to leverage two proven best practices used by private insurance companies to better protect Medicare’s bottom line:

  • Reviewing higher levels of post-payment claims for billing accuracy and
  • Adding a new layer of protection by authorizing prepayment claim reviews to prevent Medicare dollars from leaving the program in error in the first place.

CMI asks that the Secretary follow the guidance provided for the past two years by the Government Accountability Office (GAO), which has recommended that the HHS ask Congress to authorize a permanent Recovery Audit Contractor (RAC) prepayment review program to “better protect agency resources.”

Since Congress mandated the RAC Program, more than $10 billion in improper payments have been returned to the Medicare Trust Fund and more than $800 million in underpayments have been paid out to providers – balancing Medicare’s checkbook and ultimately, extending the life of the program by two full years. Unfortunately, the RAC program has been greatly scaled back due to the aggressive lobbying efforts of provider groups who oppose Medicare billing oversight programs in an effort to retain their overbillings.

“With federal budget concerns front and center, it’s time to ensure that much needed tax dollars are spent more efficiently and effectively. The combination of higher post-payment reviews with a new prepayment review program will go far to help close the loophole that’s permitted the program to overspend by more than $200 billion over the last five years. Those recovered dollars will bolster the Medicare Trust Fund and significantly reduce the severity of any needed Medicare spending cuts,” said Walter.


For more information, please visit: www.medicareintegrity.org.


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About the Council for Medicare Integrity. The Council for Medicare Integrity is a 501(c)(6) non-profit organization. The Council’s mission is to educate policymakers and other stakeholders regarding the importance of healthcare integrity programs that help Medicare identify and correct improper payments.

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