WASHINGTON — Improper Medicare payments cost about $50 billion last year, a Health and Human Services official told a House panel Wednesday, testimony that prompted a rare display of bipartisanship in a usually divided House.
The traditional Medicare fee-for-service program lost $36 billion, while Medicare Advantage lost $11.8 billion, said Gloria Jarmon, HHS' deputy inspector general. Improper payments in the fee-for-service program made up 10% of all payments in 2013, up for 8.5% in 2012, she said.
The latest data shows Medicare spending was $554.3 billion total in 2011.
"Every dollar lost to Medicare fraud is a dollar stolen from America's elderly," said Rep. Kevin Brady, R-Texas, chair of the House Ways and Means Subcommittee on Health. "And every dollar lost to improper payments — intentional or not — robs from the solvency of this important program."
Last month, HHS released data showing payments to its providers in 2012, which agency officials said would help them spot and stop fraud.
"I think most Americans, when they hear these numbers, are scandalized," said Peter Roskam, R-Ill. He joked that Republicans and Democrats "can barely agree on what time it is," but said they were "nearly unanimous" in their anger about the inability of the Centers for Medicare and Medicaid Services (CMS) to control fraud.
CMS has pilot programs to prevent fraud and has started screening all 1.5 million Medicare suppliers under new requirements, said Shantanu Agrawal, CMS' deputy administrator and director of the center for program integrity. So far, 260,000 providers and suppliers have had their billing privileges deactivated for not responding. Another 17,534 had their billing privileges revoked because they had felony convictions, had incorrect addresses, or did not have proper licensing.
In 2013, the government recovered $4.3 billion from people trying to defraud the government, and has recovered $19.2 billion over the past five years--about $10 billion more than the previous five years, Agrawal said.
The agency has made progress in strengthening enrollment security, said Kathleen King, director of health care for the Government Accountability Office.
A GAO report released Wednesday touted Medicare's improved anti-fraud efforts but highlighted areas for improvement.
Medicare, King said, should start pre- and post-payment claims review. The GAO report said CMS must do more to identify the nature, extent and underlying causes of improper payments through post-payment reviews.
Post-payment audits have helped CMS to shut down 100 home health organizations in Florida alone last year, Agrawal said.
CMS often received information after it was too late to detect or recoup an improper payment, and they also did not notify Medicare Advantage or the prescription drug program of beneficiaries who should not be allowed to enroll, Jarmon said.
"Notably, we found that Medicare paid millions of dollars for prescriptions from unauthorized prescribers, such as massage therapists and athletic trainers," Jarmon said. "We have also uncovered extreme prescribing patterns by hundreds of general-care physicians, who prescribed, for example, extremely high numbers of prescriptions per beneficiary."
More than half of those medications were for potentially addictive drugs.
President Obama's latest budget request seeks $428 million for Medicare fraud-prevention programs, which could yield $13.5 billion in savings for Medicare and Medicaid over 10 years, Agrawal said.
The budget also asks for 17 legislative changes that would provide more tools to fight fraud and help repair vulnerabilities, including expanding a pilot program that makes sure improper payments aren't made by giving CMS the authority to require prior authorization for fee-for-service items. The Power Mobility Device Prior Authorization Demonstration has decreased spending by $117 million.
The budget also asks that the HHS secretary be allowed to require electronic submissions of orders for some high-risk products and services, such as durable medical equipment or home health, to make sure a doctor has prescribed it.
Agrawal said the release of Medicare provider data last month would help reduce fraud.
Rep. Ron Kind, D-Wisc., said Congress and the president have worked to move the payment system away from a fee-for-service model and toward bundled payment so doctors are paid for total care, rather than for how many drugs or procedures they provide.
Such a change would not "preclude us from the fraud models we have in place," Agrawal said. "We still have, and continue to have, the same level of oversight."