Government saved $17.6 billion in 2011 due to fraud prevention programs

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Nursing homes will be subject to escrow for all civil monetary penalties, CMS announces
Nursing homes will be subject to escrow for all civil monetary penalties, CMS announces

A government crackdown on improper payments in federal programs, such as Medicare and Medicaid, cut wasteful payments by $17.6 billion in 2011, the Office of Management and Budget reported Tuesday.

The administration's Campaign to Cut Waste, which was launched almost two years ago, saved $7 billion in Medicare fee-for-service payment errors between 2010 and 2011, according to the OMB. Waste reduction efforts decreased Medicaid payment error rates between 2009 and 2010 for a savings of $4 billion, The Hill reported.

Additionally, Kathleen Sebelius, Secretary of the Department of Health and Human Services, announced the launch of new demonstration programs that target Medicare and Medicaid fraud, waste and abuse. They will be overseen by the Centers for Medicare & Medicaid Services.

The programs include an expansion of Recovery Audit Prepayment Reviews (RACs), which will allow the agency to review claims before they are paid to assure provider compliance. The reviews will focus on seven states with high rates of fraud and error, including Florida and Illinois, and four states with high claims volumes of short inpatient hospital stays. CMS also is enacting prior authorization for certain medical equipment.

For more information about RACs, click here; for more on prior authorization programs, click here.