OIG: Hospitals Account for 88 Percent of Improper Payments


September 9, 2013

OIG: Hospitals Account for 88 Percent of Improper Payments

HHS Report highlights effectiveness of Recovery Auditors, reveals hospitals
as top contributors to Medicare waste, fraud and abuse

Washington, D.C. – The American Coalition for Healthcare Claims Integrity today responded to a new Department of Health and Human Services Office of Inspector General (OIG) assessment of the Recovery Audit Program and improper payments in Medicare. The report concluded that Medicare Recovery Auditors (RAs) are highly effective at finding improper payments, while attributing the majority of billing errors (88 percent) to hospitals.

“This report reflects our sustained commitment to eliminating waste, fraud and abuse in Medicare,” said Coalition spokesperson Becky Reeves. “According to the OIG, RAs have been overwhelmingly successful in identifying improper payments, returning billions to the Medicare Trust Fund and promoting integrity to our nation’s healthcare system.”

Working in conjunction with the Centers for Medicare & Medicaid Services, RAs identified improper payments in half of all Medicare claims in FY2010 and FY2011, totaling $1.3 billion. According to the report, hospitals and nonphysician practitioners accounted for the bulk of improper payments with 88 percent and 5 percent, respectively. The five providers that racked up the largest improper payments were hospitals.

In addition, providers appealed only 6 percent of all RA decisions.  This finding stands in stark contrast to claims made by the American Hospital Association’s RACTrac report, which claims that hospitals effectively appealed 40 percent of all RA decisions and won reversals on 70 percent of those appeals.

“Once again, official government data exposes the illegitimacy of the self-selecting, self-reported figures from the AHA,” said Reeves. “The OIG explicitly identifies hospitals as the primary source of improper payments and outlines common sources of billing errors. We hope the hospital industry does more in the future to combat improper healthcare payments.”

The OIG report was released as the AHA continues to lobby Congress for less oversight of Medicare payments through two bills, S. 1012 and H.R. 1250 – legislation opposed by the coalition.

“With the Medicare Trust Fund predicted to be insolvent by 2024, eliminating waste, fraud and abuse must be our top priority,” said Reeves. “Our coalition will continue to work with providers, legislatures and program administrators to ensure efficiency and integrity in our healthcare system.”

For more information, please visit: www.properpayments.com.


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