Progress Reported in Curbing Medicare Overpayments

Gianna Stadelmyer/

Of some $9.6 billion in improper payments made to Medicare providers in fiscal 2010, $543 million remains “uncollectible,” according to an audit released Thursday.

And while the Centers for Medicare and Medicaid Services has made progress in its systems for tracking down the bad payments, improvements are needed in software and quality of data, according to a report from the Health and Human Services Department’s inspector general’s office.

“CMS and its contractors lack an automated method for extracting certain …. overpayment information from its systems,” the IG reported, noting that “some of the detailed data OIG requested in January 2012 would have to be searched for manually and then manually entered into a spreadsheet.”

A single contractor estimated that it would take 3,421 staff hours to look up and enter principal and interest on its account receivables, prompting auditors to simplify their data requests.

“The accuracy of the financial reports remains heavily dependent on inefficient, labor-intensive manual processes that are also subject to an increased risk of inconsistent, incomplete or inaccurate information being submitted to CMS,” the auditors found. Data on the type of Medicare service provider was not available for 54 percent of the overpayments studied.

The inspector general recommended that system planners ensure that data on provider type is always included; that letters to recipients of improper payments be mailed to addresses provided by providers; and that tax identification numbers and provider transaction access numbers be used in seeking to recover the payments, in addition to the current national provider numbers.

On reading a draft, CMS officials agreed with all but the recommendation on addresses to be used for the letters, saying the letters are already being sent to addresses provided by the medical providers and noting that providers are required to update the addresses.

Two senators praised CMS’ progress in curbing improper payments but expressed concern that only 13 percent of the uncollectable overpayments can be accurately tracked because of old software.

“Fortunately, this report provides Medicare officials with a clear roadmap to collect these improper payments through some simple and low-cost steps,” said Sen. Tom Carper, D-Del., chairman of the Senate Homeland Security and Governmental Affairs Committee, in a statement. “Given our nation’s current financial challenges, leaving hundreds of millions of dollars in waste on the table is simply not an option.”

Sen. Claire McCaskill, D-Mo., chairwoman of the committee’s Financial and Contracting Oversight panel technology offered more tools than ever to help avoid wasting government money. “If we’re going to continue lowering our deficit, this is exactly the kind of low-hanging fruit we need to go after,” she said.

(Image via Gianna Stadelmyer/

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