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RACFacts: Obvious Medicare Improper Payments Go Undetected

Obvious Medicare Improper Payments Go Undetected

There is a lot of talk lately of “improper payments,” especially when it comes to Medicare. Earlier this month, the GAO released a report stating Medicare has the highest rate of improper payments government-wide, with overbillings of nearly $60 billion in 2014. Of that total, $46 billion was lost specifically from the Medicare Fee-For-Service program. This ultimately means Medicare paid out $60 billion for claims billed improperly in violation of Medicare policy.

Although the Recovery Audit Contractor (RAC) Program was put in place to find these errors and return overpayments back to the Medicare Trust Fund, the program has been sidelined for the past year-and-a-half. The current audit moratorium has caused the rate of improper payments to skyrocket to 12.7 percent – the highest rate in history. In addition, per CMS policy, RACs only review 2 percent of all Medicare claims, leaving 98 percent of claims unaudited.

One would think it’s natural for there to be some billing mistakes within such a large program, but to wrap your arms around the unbelievable level of wasted taxpayer dollars within the program, it’s worthwhile to take a look at some of the typical types of mistakes taking place on a massive scale and draining the Medicare Trust Fund.

Following are some examples of typical errors causing a Medicare claim to be denied:

  • Home health episodes that started after beneficiaries’ deaths
  • Oncology radiation calculations that were billed by a provider and a physicist one week before the patient was seen in the office
  • Drugs paid for ten times the amount administered
  • Hospital claims coded with illnesses the patient didn’t possess
  • Excessive units of medication, where the billed dose would be harmful or lethal (where a provider double billed a medication)
  • Provider billed for services in one area of the body where procedures are reimbursed at a higher level when medical record documentation identifies that patient received injections in area where procedures are reimbursed at a lower level

Congress created the RAC program to be the first line of defense for the Medicare Trust Fund, but with the program effectively benched, egregious errors like these remain undetected.

We ask Congress and CMS to continue to make Medicare program integrity a priority by allowing the RAC program to get back to work reducing waste, fraud and abuse.

       
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