New Medicare Policy Likely to Hide Improper Payments

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New Medicare Policy Likely to Hide Improper Payments

While the government points the finger at crooked corporate accounting, it should take a closer look at its own books. Missing are the future liabilities to Medicare beneficiaries. This puts the program’s future solvency into doubt. In addition, audits have found that an estimated $93.6 billion in claims have been paid in error since 1996. Less than one out of every 10 physicians’ claims has been checked for questionable charges. Beneficiaries pay big premium increases every year to cover sharply rising costs.

Medicare administrators have vowed to root out the problems. A new policy seems to be decreasing “overpayment” amounts substantially, virtually eliminating the need for corrective action. A closer look reveals, however, that claims reviewers have been told to limit their use of “extrapolation”—the process by which they estimate the amount that has been paid in error from a sampling of claims that have been checked. Instead of estimating the amount of improper payments from all claims as before, only those cases that involve “major” billing problems are to be extrapolated now. Billions in improper payments are no longer counted. The policy is likely to make it appear that improper payments have been reduced, but instead they’ve been covered up.

No private companies could do business this way, but there’s no law that prevents our government from doing so.

November 2002