GAO Pegs Medicare Fraud At $48 Billion In 2010

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imageFradulent or improper payments accounted for roughly $48 billion of Medicare’s $507 billion budget in 2010, according to a report issued by the Government Accountability Office (GAO).

“Medicare remains on a path that is fiscally unsustainable over the long term,” the report states. “This fiscal pressure heightens (the Centers for Medicare & Medicaid Services') challenges to reform and refine Medicare’s payment methods to achieve efficiency and savings and to improve its management, program integrity, and oversight of patient care and safety.”

Prepared for a House Energy and Commerce Oversight Subcommittee hearing on Medicare and Medicaid fraud, the report indicates that CMS has made progress in improving efficiencies, notably in its competitive bidding program for durable medical equipment and the transfer of fee-for-service claims administration to new Medicare Administration Contractors. However, the GAO cites as a pressing concern its discovery of “ pervasive internal control deficiencies in CMS’ management of contracts that increased the risk of improper payments.”

Specific actions for CMS, recommended by the GAO to refine payment methods and to encourage efficient provision of services, are contained in the report. Such actions include ensuring the implementation of an effective physician profiling system and managing payments for services; imaging falls into the latter category. The GAO also urges CMS to systematically apply payment changes to reflect efficiencies achieved by providers when services are commonly furnished together; and to refining the geographic adjustment of physician payments by revising the physician payment localities using an approach uniformly applied to all states and based on current data.

In a testimony before the subcommittee, GAO Healthcare Director Kathleen King noted that CMS must take further action to establish policies to improve contract oversight. Better targeting of reviews of claims for services with high rates of improper billing, along with improvements the monitoring of nursing homes with serious care problems, are also warranted, King observes.