Top 10 States with Highest Medicare Waste

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CONTACT: Kristin Walter
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Top 10 States with Highest Medicare Waste 
Council for Medicare Integrity releases analysis of states’ Medicare waste

Washington, D.C. – The Council for Medicare Integrity (CMI) today released an analysis of waste within the Medicare Fee-For-Service program. The analysis, which looks at how much money each state wastes per beneficiary, found that the District of Columbia has the highest amount of Medicare waste per beneficiary among in the entire United States with $177.84 wasted per beneficiary. This is especially surprising because the District of Columbia has the nation’s smallest number of Medicare beneficiaries, according to the Centers for Medicare and Medicaid Services (CMS).

The rankings are part of CMI’s latest trend report, States & Medicare Waste, which analyzes the overpayment and underpayment data provided in the most recent CMS report, Recovery Auditing in Medicare For Fiscal Year 2014[1], to rank states based on Medicare waste per beneficiary (for Part A and Part B claims[2]).

CMI found that the District of Columbia wasted more than double the amount of the number 10 ranking state, South Dakota, and more than 23 times the state with the least waste per beneficiary, Vermont, which improperly billed $7.58 per beneficiary.

Interestingly, North Dakota and South Dakota, each also among the states with the least number of Medicare beneficiaries, ranked in the top 10 states with highest Medicare waste per beneficiary.

CMI’s analysis also ranks the states with the highest returned underpayments, the states with the least Medicare waste, and the state with the least returned underpayments.

“Medicare loses more money to waste than any other government program – $46 billion in FY2014 alone – and the billing error rate continues to be on the rise. This incredible loss of taxpayer dollars is one of the top reasons Medicare Trustees now say the program will be bankrupt within the next 15 years. Medicare auditing is more necessary than ever to ensure the program will be in place when we need it in the future. It’s time to stand up and ensure your Member of Congress supports the RAC program’s work to prevent the waste of your taxpayer dollars,” said Kristin Walter, spokesperson for the Council for Medicare Integrity.

Congress created the Recovery Audit Contractor (RAC) program to review post-payment Medicare claims and recover funds that were inappropriately paid out from the Medicare Trust Fund. The auditors review only 2 percent of a provider’s Medicare claims, but since their establishment, the RACs have recovered more than $10 billion back to the program, prolonging its life.

Due to pressure from the hospital industry, which does not want oversight of their Medicare billing, the RAC program was paused in early 2014. Since then the RAC program has been scaled back significantly, with auditors only able to review less than half of the problematic billing issue areas that had previously been approved to audit. This pause has cost Medicare billions of dollars, while allowing providers to freely bill the program without review of their Medicare claims.

“Each state must do their part to curb Medicare misbilling,” said Walter. “If all entities involved made eradicating waste a priority, we would not have to worry about losing Medicare altogether in 2030.”

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


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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