Twenty-One States Have Higher Medicare Overbilling Than The National Average


CONTACT: Kristin Walter
(202) 898-0995

Twenty-One States Have Higher Medicare Overbilling Than The National Average

 Improper Billing Pushing Program to Bankruptcy

Washington, D.C. – According to new data from the Centers for Medicare and Medicaid Services, 21 states are projected to have above average rates of overbilling Medicare for services. According to the Supplementary Appendices for the Medicare Fee-for-Service (FFS) 2015 Improper Payment Report, the national average for improper payments during that year was 12.1 percent, one of the highest rates to date.

The list below details the 21 states whose improper payment rates – or the percent at which Medicare FFS providers overbill according to Medicare policy – are above the national average.

States with Above Average Improper Payment Rates

 State Name  Projected Improper

 Payment Rate

Projected Overpayments
 Louisiana  19.4% $1,250,400,000
 Texas  17.3% $4,310,700,000
 North Dakota  17.1% $100,000,000
 Wyoming  16.7% $63,900,000
 Georgia  16.5% $1,609,500,000
 New Mexico  15.6% $212,000,000
 Kentucky  15.4% $897,700,000
 Oklahoma  15.4% $658,100,000
 Illinois  14.7% $2,353,600,000
 Alabama  14.3% $885,600,000
 Ohio  13.7% $1,791,700,000
 New Jersey  13.7% $1,782,900,000
 Mississippi  13.7% $528,600,000
 California  13.6% $4,505,600,000
 Pennsylvania  13.6% $1,936,000,000
 District of Columbia  13.4% $86,300,000
 New Hampshire  13.4% $241,000,000
 Nevada  13.1% $289,100,000
 South Carolina  12.8% $797,300,000
 Florida  12.7% $3,449,000,000
 Virginia  12.3% $992,000,000

Louisiana topped the list of states with above average improper payment rates, overbilling in 19.4 percent of cases, for a total of $1.25 billion lost from the Medicare Trust Fund stemming from that state alone.

“This shocking list shows that it is not just one or two states that are responsible for the high average of improper payments nationwide; but in fact, overbilling is rampant all across the country,” said Kristin Walter, spokesperson for the Council for Medicare Integrity.

The Supplementary Appendices contain the data that will eventually become what is known as the agency’s 2015 Comprehensive Error Rate Testing (CERT) report. The CERT program evaluates a statistically valid random sample of claims to determine if they were paid properly under Medicare coverage, coding, and billing rules.
Since 2011, the rate of Medicare FFS improper payments has risen steadily from 8.6 percent to 12.1 percent in 2015, which equates to a loss of more than $40 billion annually to the Medicare Trust Funds.

Recently, both the Congressional Budget Office (CBO) and the Medicare Trustees released reports raising concerns that the Medicare program will be insolvent before 2030, bringing greater attention to the need to reduce the high levels of misbilling within the program.

In an effort to reduce waste within Medicare, the Recovery Audit Contractor (RAC) Program was put in place by Congress in 2009 to review Medicare FFS post-payment claims to identify and recover improper payments made to providers. The program historically has reviewed only 2 percent of Medicare claims and, due to complaints of perceived undue burden by the hospital lobby, the rate of review of a provider’s post-payment claims was reduced to just 0.5 percent. This means that 99.5 percent of hospital post-payment claims are not reviewed at all for billing accuracy.

When the RAC program was working at previous full-scale levels, Senator Claire McCaskill (D-MO), the Chairman and Ranking Member on the U.S. Senate Special Committee on Aging, credited the RACs with returning $10 billion back to Medicare and extending its life by two years.

In a recent interview, House Speaker Paul Ryan (R-WI) pointed to what the end of Medicare would mean for the 55 million Americans who rely on the program for healthcare coverage, “I believe that if we do not prevent Medicare from going bankrupt, it will go bankrupt. And that will be bad for everybody.”

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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