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Reducing Medicare Waste Could Make Down Payment on Prescription Drug Benefit (Press Release) Alexandria, VA (March 27, 2001) -`Reducing the rate of waste, fraud and improper payments in Medicare could make a substantial down payment toward adding a prescription drug benefit or improving the quality of care,` says George Smith, chairman of TREA Senior Citzens League (TSCL). Recently the Office of Inspector General estimated that Medicare lost about $11.9 billion to waste, fraud and mistakes in fiscal year 2000.1 That figure is about half of what was lost five years ago, but this estimate may understate the true extent of improper payments.2 `The estimated $11.9 billion is just the tip of the iceberg. Although Medicare has made progress in the reduction of improper payments to doctors, hospitals, and other health care providers, plenty of opportunities for gaming the system still exist in other areas,` he contends. An example of this is a recent change in the payment system to home health care agencies and nursing homes. Under the old system Medicare paid for all the services that were delivered. Under the new system providers are paid fixed rates rather than for each service. Providers face the risk of loss if their costs exceed their Medicare payments, but under this approach they can boost profits by skimping on services. In a similar manner, managed care plans are paid a fixed amount for each beneficiary. Plans may be overpaid when they favor the enrollment of relatively healthier beneficiaries, misreport data to increase payments, or fail to deliver required services. `The annual review by the Office of Inspector General has proven that we can reduce improper payments in Medicare-but that review has focused on Medicare`s fee-for-service payments. Medicare also needs effective monitoring in other areas to prevent providers from boosting profits by inappropriately reducing patient care,` Smith declares. `We urge Congress to continue to provide the oversight to eliminate waste, fraud and improper payments in all of the Medicare programs. The money we save can go a long way to providing prescription drugs or better quality health care.` TSCL is a national group of politically active seniors concerned about the protection of their earned Social Security, Medicare, military, and other retirement benefits. TSCL members participate in a number of grassroots lobbying and public education campaigns to ensure governmental bodies, including the Social Security and Health Care Financing Administrations, live up to their commitments. "For more information, send $1.00 for shipping and handling to: TREA Senior Citizens League, Dept. W10306, 909 N. Washington St., Suite 300, Alexandria, VA 22314".
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