Medicare paid about $13.5 billion more than it should have to health care providers in fiscal 1999, according to an audit released Thursday by Health and Human Services Inspector General June Gibbs Brown.
The estimate, which represents an "error rate" of just under 8 percent of the program's fee-for-service payments, is up from last year's $12.6 billion, but is still within a statistical margin of error, Brown told the Senate Labor-HHS Appropriations Subcommittee.
"I don't believe it's statistically significant. It's probably a plateau," Brown told the panel.
What is clear, testified both Brown and Medicare administrator Nancy-Ann Min DeParle, is that Medicare has significantly reduced its level of mispayments. This year's total is $6.8 billion less than the fiscal 1997 audit found, and $9.7 billion less than the level estimated by the IG during its first audit for fiscal 1996. This year also represented the first time independent auditors were able to issue a "clean opinion" on the Health Care Financing Administration's financial statements. When the first audit was done four years ago, DeParle said, "The books were such a mess they couldn't express an opinion."
Most of the increases in this year's audit were attributable to physicians, home health care providers, and durable medical equipment suppliers, said Brown. The biggest jump in errors fell under "unsupported services," or those payments for which no documentation of need could be found in medical records or for which medical records were not produced after repeated requests.
Also up were payments for treatments found not to be "medically necessary."
In a statement distributed at the hearing, the American Medical Association blasted the use of a gross dollar amount for mispayments as "irresponsible grandstanding." Nancy Dickey, the AMA's immediate past president, said: "The system is complex and involves understandable differences of opinion over clinical judgment or the level of service provided. The simple fact is much of Medicare billing is subjective, and honest people can disagree."
But, responding to a question from Labor-HHS Appropriations Subcommittee Chairman Arlen Specter, R-Pa., about whether Medicare regulations are too complex, DeParle said most of the mispayments are not a matter of regulatory interpretation.
"It's 'Did you see the patient or did you not?' It's 'Did you provide the service or did you not?'" she said. Specter, who at one point suggested Medicare might deter more fraud by sending people to jail rather than merely recouping the money, also responded to the AMA allegations. "If fighting fraud is grandstanding, we need a little more of it," he said.
NEXT STORY: TSP's C Fund continues to slide