The Government Accountability Office, which provides oversight to Congress, recently released a report sharing an alarming figure. Medicare lost $60 billion to improper billing in 2014, and of that, $46 billion was lost specifically from the Medicare Fee-For-Service program.
The report shares that Medicare has the highest rate of financial waste government-wide. Hemorrhaging tens of billions of taxpayer dollars each year should be alarming to all, especially in light of the fact that the losses keep trending exponentially higher.
The 2014 loss of $46 billion is a 50% increase over 2012, during which $29 billion was lost to improper billing.
So, why should we all care about the climbing rate of improper billing within Medicare? Because these numbers will ultimately impact everyone who plans to enroll in Medicare when they turn 65. At this rate, if we don’t rein it in now, we will all be wondering where Medicare went when we needed it.
Medicare officials currently estimate the program will exhaust its funding in the next 15 years – by 2030. To help tamp down the rising rate of improper Medicare billing, in 2009, Congress launched the Recovery Audit Contractor program to review Medicare claims and return misused taxpayer funds to the program. These recoveries directly impact the program’s ability to extend its solvency date.
Since the RAC program began five years ago, it has returned more than $9 billion to the Medicare Trust Fund, all while reviewing less than 2 percent of all Medicare claims, per Centers for Medicare & Medicaid Services rules. And here is a point often ignored: RACs also return hundreds of millions of dollars to providers through the recovery of underpayments – where a provider underbilled Medicare. Providers and hospitals have since recouped more than $800 million in payments they rightly earned, due to the work of the RAC program. In fact, during the third quarter of fiscal year 2014 alone, RACs returned $100.4 million in underpayments to providers and hospitals.
Despite the documented success of the RAC program, we hear a great deal about the burden that auditing creates for providers. It’s hard to understand how a review of no more than 2% of a provider or hospital system’s Medicare claims can be construed as a burden, especially in light of the fact that providers comply as a course of business with a review of all claims paid by private insurance companies.
In addition, to support the provider community, the RAC program compensates providers with $25 for each claim record requested, even though 60% of those records are simply delivered electronically.
For the past 18 months, the government has put the RAC program on a shelf, while they determine how to deal with confusion among providers regarding billing short inpatient hospital stays. It’s time now to stop the dragging of feet, make decisions about the policy and get the RAC program back on track reviewing Medicare claims at previous levels.
According to Leslie Page, vice president of policy and communications at Citizens Against Government Waste, “with RACs sidelined, taxpayers are being shafted and the Medicare Trust Fund is losing money it will likely never get back.” It’s time for all Medicare stakeholders to start rowing in the same direction and worry more about getting it right than benefitting special interests. This is not the time to take down Medicare oversight, which would occur at the expense of 50 million Americans, and all of our future healthcare needs.
Recovery Auditors work to ensure providers are compensated fairly according to Medicare policy. Recovery Auditors have a 95% accuracy rate. According to CMS, they are only challenged and overturned on appeals 9.3% of the time. The program works when it’s permitted to perform.
Similarly, we know that many providers get it right – managing to bill according to Medicare policy while providing the best care for their patients. It is therefore unfortunate that Washington lobbyists representing the hospital industry, which according to CMS is responsible for 94% of all Medicare billing errors, have committed to aggressive efforts to weaken Medicare oversight. It paints even well-meaning providers as wanting to bill Medicare whatever they want while no one is watching. It’s a disservice to those physicians and hospitals that are doing everything possible to lower the amount of waste in the Medicare system. We urge lawmakers and CMS to continue to improve and protect the critical oversight programs that serve the best interests of taxpayers and Medicare’s current and future beneficiaries.
Kristin Walter is spokeswoman for Council For Medicare Integrity.