10% Of Medicare Budget Goes To Fraud And Billing Mistakes

Recently, the Justice Department arrested over 400 people for medical care fraud. This is a particularly heinous crime, since most of that fraud was in the Medicare program -- the program dedicated to making sure that senior Americans have adequate medical care. If found guilty, I hope these people receive very stiff fines and prison sentences.

But the truth is that these arrests are only a drop in the bucket when it comes to Medicare fraud and abuse. It is estimated that from 10% to 11% of the Medicare budget is eaten up by fraud, waste, or over-billing. That's tens of billion dollars each year.

I think both Democrats and Republicans can agree that this is unacceptable. But it won't be fixed by just cutting Medicare funding (as the Republicans would love to do). We need to have better bookkeeping and accountability systems by the government, and more vigorous enforcement of Medicare laws and regulations by the Justice Department.

Here is just part of a good article on this issue by Fred Schultz for Kaiser Health News and the Center for Public Integrity:

Federal health officials made more than $16 billion in improper payments to private Medicare Advantage health plans last year and need to crack down on billing errors by the insurers, a top congressional auditor testified Wednesday.

James Cosgrove, who directs health care reviews for the Government Accountability Office, told the House Ways and Means oversight subcommittee that the Medicare Advantage improper payment rate was 10 percent in 2016, which comes to $16.2 billion.

Adding in the overpayments for standard Medicare programs, the tally for last year approached $60 billion — which is almost twice as much as the National Institutes of Health spends on medical research each year.

“Fundamental changes are necessary” to improve how the federal Centers for Medicare and Medicaid Services ferrets out billing mistakes and recoups overpayments from health insurers, he said.

Medicare serves about 56 million people, both those 65 and older and disabled people of any age. About 19 million have chosen to enroll in Medicare Advantage plans as an alternative to standard Medicare.

Federal officials predict the Medicare Advantage option will grow further as massive numbers of baby boomers retire in coming years.

Standard Medicare has a similar problem making accurate payments to doctors, hospitals and other health care providers, according to statistics presented at the hearing. Standard Medicare’s payment error rate was cited at 11 percent, or $41 billion for 2016.