HHS Wasted $62 Billion On Fraudulent And Improper Payouts In 2013
July 11, 2014 by Ben Bullard
Obamacare wasn’t the only thing the Department of Health and Human Services (HHS) was screwing up last year. A Senate report released Wednesday accuses the maligned department with squandering more than $62 billion in fraudulent or improper benefit payments in 2013.
The report, done by the Senate Special Committee on Aging, shows that HHS blew through $62.2 billion in bogus Medicare and Medicaid payouts, comprising 10.1 percent of all benefit payments the department administered in 2013.
That’s an increase from fiscal year 2012, when HHS managed an improper payment rate of 8.5 percent, and represents a backslide from prior years, during which the department had managed to trim the rate of such occurrences.
According to the Government Accountability Office (which considers Medicare a high-risk program because of its propensity for improper spending), the Centers for Medicare and Medicaid Services (CMS) is responsible for the bulk of the mismanagement, paying out about $50 billion in improper benefits last year.
“The improper payment rate rose this year despite multiple efforts by the CMS and its contractors to review claims both before and after payment, and to implement automatic payment rules, or edits, which deny claims that do not comply with Medicare requirements before payment occurs,” the Senate report states. “Industry stakeholders have complained that the CMS’s multiple audits and claims review processes are duplicative and poorly coordinated, placing an undue burden on providers, while doing little to reduce improper payments.”
Indeed, Committee members criticized CMS’s risk management approach, which focuses more on auditing to catch past mistakes instead of preventing them from happening in the first place.
“The increase in audits has not translated into a reduction in improper payments,” said ranking Senator Susan Collins (R-Maine). “In fact, Medicare is currently experiencing its highest improper payment rate in five years.”
The report itself cites an example that has arisen from the implementation of Obamacare, which in the early going has been plagued by technical and administrative mix-ups that leave the door open for improper benefit payments.
“The Affordable Care Act also expanded the RAC [Recovery Audit Contractor] program to Medicaid and began audit processes in some states in 2012,” the report notes:
The American Dental Association (ADA) immediately began to hear concerns from its members and reached out to Members of Congress to call for transparent, fair, consistent and statistically sound audit processes in each state. The ADA’s concerns primarily center around the lack of transparency in the audit process and notification procedures. Additional concerns include the statistical sampling and extrapolation methods used, the qualification of RAC auditors, and the knowledge level of those auditors regarding specific State Medicaid billing regulations.
Audited providers were also concerned that no efforts were made by either CMS or the RACs to education providers or help them learn from overpayment errors in order to avoid future audits and collections. The ADA’s primary concern was that the burdensome and opaque nature of the audit process may cause providers to drop out of the Medicaid program, which already struggles to attract and maintain dental professionals willing to provide critical dental services to Medicaid patients.
In other words, not only is the CMS focus on auditing ineffective at stopping abuse, but it’s also driving dentists away from providing services to people who acquire insurance through Obamacare.
That effectively sabotages Obamacare’s fundamental promise: to offer affordable healthcare coverage to more people and to ensure patients ready access to an adequate array of healthcare provider options.