Report: Texas Is Sixth Worst State In U.S. For Wasteful Medicare Billing

From D Healthcare Daily, D Magazine:

Report: Texas Is Sixth Worst State In U.S. For Wasteful Medicare Billing

A federal report has found that Texas was the sixth-worst state in the nation for excess and errant Medicare charges in 2013, a year that saw Lone Star State providers overbill the feds to the tune of $152 million, about $56 million more than they did the year before.

The Centers for Medicare and Medicaid Services presented the 2013 Recovery Audit Contracting program report to Congress late last year. The state data was ranked and sorted by the Council for Medicare Integrity, a nonprofit that represents the independent contractors hired by CMS to research waste for that RAC report. Its analysis was released this week.

According to the Kaiser Family Foundation, Texas has close to 3.2 million Medicare beneficiaries, the third most of any state in the country. With that total, it’s perhaps no surprise that it ranks high on the RAC report—the providers are seeing more beneficiaries, which increases the risk of error. Now, this isn’t fraud; it’s waste.

These are claims with too little identifying information to defend procedures that were provided or the physician coded incorrectly or the hospital prescribed something that is not within CMS guidelines.

“Ultimately, there’s a lot of different things we can be looking for,” said Kristin Walter, spokeswoman for the Council for Medicare Integrity. “Sometimes, it’s things like whether someone’s characterized as an inpatient or an outpatient for the care that they received.”

Each provider can appeal the determination, and the private contractors make between 9 percent and 12.5 percent of what is paid back to the Medicare Trust Fund. In all, CMS says the auditors resulted in $3 billion returned into the trust fund during FY2013.

Texas’ $152 million in overpayments in a hair behind Pennsylvania’s $153 million, but significantly trails California’s $517 million, which was the most of any state in the nation. New York trailed with $309 million, followed by Florida’s $239 million, and Missouri’s $170 million.

But the recovery program audits just 2 percent of a provider’s Medicare claims, meaning the waste could be much larger than what’s being found by the auditors, Walter says.

“That little number gets lost in the conversation a lot,” she added. “That’s why we’re hoping that consumers will talk to their representatives about why this is important to get right and why it’s important for this program to stay solvent and be there for the people who need it in the future.”

It’s not without its critics, however. Hospitals account for about 94 percent of all wasteful Medicare claims. The American Hospital Association says the RAC process “subjects hospitals to additional administrative burden and costly payment denials.” They say the commission rates are such that the structure promotes selectively pursuing only the highest-dollar inpatient claims. Its stance toward these contractors is firm and strong: “RACs are bounty hunters paid a contingency fee based on the money clawed back from denied claims.”

The CMI, however, maintains the program is a success and necessary to reforming Medicare and holding hospitals accountable. Since its inception in 2009, the auditing program has returned $8.9 billion to Medicare’s trust fund.

“The one thing at most enormous concern for us is the fact that as these errors are happening at such an alarming rate,” Walter said. “We’re being told the Medicare trust fund is essentially going to run out in the next 15 years if we don’t stop this hemorrhaging. How can we ensure that it will be there?”


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