HHS Spent $62 Billion On Improper Payments In Health-Care Programs Last Year

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The federal government’s health-care programs made over $62 billion in improper or fraudulent payments last year, according to a Senate report out Wednesday, and the sum is likely to rise in the future as the federal government’s role in health care is expanding drastically.

Medicare, Medicare Advantage and Medicaid alone accounted for $62.2 billion of the federal government’s improper payments in 2013, the last full year of former Health and Human Services Secretary Kathleen Sebelius’ tenure, according to the Senate Special Committee on Aging report.

While improper payments across the entire federal government have dropped from a record-high $121 billion in 2010 to $105 billion total last year, incorrect payouts from federal health-care programs are growing.

In 2012, 8.5 percent of all Medicare payments were considered incorrect, but last year the rate grew to 10.1 percent. Medicare has hired more auditors to provide higher levels of oversight to the Medicare and Medicaid payment processes, but so far they’ve failed to actually prevent the improper payouts from happening.

“Medicare just isn’t getting the job done when it comes to preventing payments errors,” said committee chairman Sen. Bill Nelson. “Medicare must change the way it pays its providers so that the cheats are getting caught and the honest providers are getting paid.”

Ranking member of the committee Maine Republican Sen. Susan Collins pointed out that the auditors aren’t helping.

“The increase in audits has not translated into a reduction in improper payments,” Collins said. “In fact, Medicare is currently experiencing its highest improper payment rate in five years.”

The bipartisan report focused on the growing rate of Medicare and Medicaid fraud and even honest mistakes, emphasizing that the health care programs administrator, the Centers for Medicare and Medicaid Services (CMS), must shift from documenting improper payments that have already occurred and attempt to prevent the faulty payments from happening in the first place.

Absent any drastic changes in the federal government’s practices, however, improper health care payments are, if anything, likely to increase over the next several years. CMS administers Medicare, Medicaid and beginning this year, Obamacare as well — creating yet another opportunity for taxpayers to be hit billions in improper payments.

The risk for improper taxpayer spending through the Affordable Care Act is well-documented. Because CMS failed to build an income verification system in time for Obamacare’s launch, the Obama administration is belatedly sending out millions of letters to customers asking them to provide further proof of their eligibility for premium subsidies through Obamacare exchanges.

The administration has not yet announced whether it will even attempt to recover improper subsidy payments from Obamacare customers; it’s possible taxpayers will be at a loss for the first year’s costs. But given the bipartisan committee’s complaints about CMS’ ability to recover payments in its longstanding health-care programs, it may be difficult to get back improper payments through new programs as well.

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