Medicare Trustees: Part A Program Insolvent by 2029


 Increased Focus on Reducing Improper Payments Can Extend the Life of the Medicare Program

Washington, D.C. – A new Medicare Trustees report today predicts that the Medicare inpatient Trust Fund will only be fully funded until 2029. After that, Medicare Part A will only have enough to fund 88 percent of what’s covered today. The report goes on to warn lawmakers and the executive branch that they must “work closely and with a sense of urgency” to ensure the long-term stability of the Medicare program.

Continued growth in healthcare costs and the number of plan beneficiaries have contributed to uncertainty in Medicare’s financial future. In addition, rampant improper billing within Medicare is a real threat to the future of the program. The Medicare billing error rate has exceeded 11 percent for the past three years, which equates to a program loss of more than $130 billion. Though Medicare is vital to the economic security of many seniors, some providers frequently misbill the program for services that are either not medically necessary, lack the proper documentation or coded improperly according to Medicare policy.

“Congress must take action to ensure that Medicare stops hemorrhaging billions of taxpayer dollars in improper payments each year,” said Kristin Walter, spokesperson for the Council for Medicare Integrity. “Closing that loophole would go far to providing more financial security for Medicare Part A and help push any insolvency date even further away. The government has great tools at their disposal that could help bolster the solvency of the program, but those tools are severely under utilized. It’s time to stop ignoring the program’s loss of more than $40 billion each year, and instead recover those dollars to ensure coverage of future healthcare needs for our nation’s seniors.”

In 2006, Congress mandated the creation of the Recovery Audit Contractor (RAC) Program to help protect the integrity of the Medicare Trust Funds. RACs review post-payment Medicare claims; identify areas where improper billing is taking place; correct the claims and request that the overages are paid back to Medicare. The federal government pays nothing up front for RACs to do this work; instead, RACs must be highly accurate in order to get paid.

Thus far, the RAC program has returned more than $10 billion back to the Medicare Trust Funds and extended its life by two full years. Despite this success, recent decisions have slashed Medicare oversight to a barely detectable level. CMS currently allows recovery auditors to review fewer than 20 Medicare claim types (down from 800 claim types initially) and within those issues, auditors can review a mere 0.5 percent of Medicare provider claims after they have been paid.

“Considered a basic cost of doing business, the same providers billing Medicare comply, without issue, with the more extensive claim review requirements of private health insurance companies. Currently, within Medicare, a provider can bill erroneously 91 percent of the time and only have 5 out of every 100 claims reviewed for accuracy. This lack of Medicare oversight is appalling – essentially throwing away billions of taxpayer dollars while planning coverage cuts due to looming insolvency,” said Walter. “We must place a much greater emphasis on billing accuracy to ensure that our tax dollars are spent effectively and efficiently.”

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

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