GAO Report Outlines Medicare, Medicaid Waste

Tuesday, 11 Dec 2012 03:37 PM

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A Government Accountability Office report has found that Medicare and Medicaid made more than $50 billion in bad payments during fiscal year 2011, in addition to wasting time and money while doing so.

The report, “Medicare Wastes Money In Fraud Work,” found that duplicative services and efforts, as well as multiple processes meant to avoid fraud and improper payments, wasted time and money, and didn’t help either program to better monitor its payouts.

“GAO’s work once again highlights how ineffective the federal government is at addressing waste, fraud, and abuse in our health care programs,” Sen. Scott Brown, R-Mass. said about the report.

The report, ordered by Sen. Tom Carper, D-Del., and Sen. Tom Coburn, R-Okla., arrives as members of Congress take a serious look at both programs amid negotiations to avoid the fiscal cliff, with cuts to Medicare and Medicaid being considered.

GAO officials conducted the study after being asked to review prepayment edits in Medicare, a system which compares claims data to Medicare requirements before approving or denying them, or forwarding them for further review.

The prepayment edit system is the method by which Medicare verifies service providers, as well as comparing claims and costs for anomalies that might indicate fraud in the system. It was instituted as part of Obamacare to cut down on improper payments and save time and money on investigating potential fraudulent cases from being paid.

Use of the system resulted in at least $1.76 billion in savings in 2011, but GAO said much more could have been saved if weaknesses in the system had been addressed, according to the non-profit group Government Health IT, which promotes the use of information technology to improve healthcare services.

Those weaknesses include: Incomplete analysis of vulnerabilities to improper payment; lack of time frames for either following the edits or taking other actions; flaws in the edits themselves; and a lack of centralization and organization to those edits, making the entire system inconsistent.

In the case of Medicaid, the Medicaid Integrity Group, which is responsible for monitoring fraud and waste in the program, contracted out those services. Meaning the government-sponsored office double-paying for the service — they were responsible for those tasks, and then they paid another company to do them.

“The reports lay out some specific changes to Medicare and Medicaid that can help save taxpayers millions of dollars by improving oversight to identify, and ultimately prevent, fraudulent and wasteful Medicare and Medicaid payments,” Carper said.

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