Lawmakers, federal reports target 'high-error' Medicare program

House panel hears testimony on site-neutral payments, potential for Medicaid cuts to providers
House panel hears testimony on site-neutral payments, potential for Medicaid cuts to providers

Medicare's high rate of improper payments and problems weeding out ineligible providers came under fire Tuesday via federal reports and a House committee.

In fiscal year 2015, close to $60 billion out of the $568.9 billion paid by Medicare for healthcare services — about 10.5% of all payments — was paid improperly. Those improper payments landed the program on the Office of Management and Budget's list of “high-error” federal programs, as well as a high-risk designation by the U.S. Government Accountability Office, said Seto Bagdoyan, director of forensic audits and investigative service for the GAO.

Bagdoyan testified Tuesday during a hearing on Medicare and Medicaid integrity, improper payments and ineligible providers for the House Energy and Commerce Subcommittee on Oversight and Investigations. The high level of improper payments in the Medicare program have created a “major problem” for federal agencies, said Committee Chairman Rep. Tim Murphy (R-PA), during the hearing.

“Improper payments muddy the waters, and make it harder for auditors and investigators to root out fraud and abuse,” Murphy said. “If the system is murky and confusing, that only benefits the fraudsters taking advantage of our system.”

Murphy expressed disappointment that despite previous subcommittee hearings on wasteful spending in federal health programs, CMS has yet to implement some of the recommendations suggested at the hearings and by the GAO and the Office of Inspector General for the Department of Health & Human Services.

CMS has taken some steps toward remedying improper payments and closing gaps in provider screenings, Bagdoyan noted, although weaknesses still exist in the way Medicare screens and blocks ineligible or potentially fraudulent providers from enrolling. Bagdoyan's testimony was released as a GAO report on Tuesday.

“[GAO] found weaknesses in CMS's verification of provider practice location, physician licensure status, providers listed as deceased or excluded from participating in federal programs or healthcare–related programs, and criminal-background histories,” Bagdoyan said. “These weaknesses may have resulted in CMS improperly paying thousands of potentially ineligible providers and suppliers.”

Those screening vulnerabilities were the subject of a report by the OIG also released on Tuesday. The report found more than three-quarters of Medicare providers reviewed had names of owners — individuals or corporations with a 5% or more ownership interest, or other managing employees — that did not match CMS' records.