Medicare payment errors near $20B
Tuesday, December 14, 2004 Posted: 8:04 AM EST (1304 GMT)
WASHINGTON (AP) -- Medicare wants to cut the rate of questionable payments
by more than half, to 4 percent, by 2008, administrator Mark McClellan says.
"The main objective here is to pay it right," McClellan said Monday, the day
Medicare reported that private companies that process health claims from its
beneficiaries made nearly $20 billion in erroneous or questionable payments
last year, an error rate of 9.3 percent.
That performance was a slight improvement over the previous year.
The error rate measures claims that were paid despite being medically
unnecessary, inadequately documented or improperly coded. In some instances,
Medicare asked health care providers for medical records to back up their
claims and got no response.
The survey does not document instances of alleged fraud, McClellan said.
More extensive payment reviews and other quality controls will help the
agency achieve the 4 percent goal, he said.
Medicare, the government health program for older and disabled Americans,
contracts with private insurers to pay more than 1 billion claims each year.
Monday's report was based on a survey of 160,000 claims, Medicare said.
Last year, Medicare reported the error rate as 5.8 percent, but that figure
had been adjusted to factor out a high proportion of claims for which the
health care provider did not respond to Medicare's request for
documentation.
The unadjusted rate was 9.8 percent, using the same criteria that produced
this year's 9.3 percent rate.
Medicare said it abandoned the adjustment because its analysis was larger
and more detailed.
Sen. Charles Grassley, R-Iowa, who sharply criticized last year's
adjustment, said Monday the public is getting a more complete picture in the
new report.
Still, Grassley said, "With an improper payment amount of nearly $20 billion
and an error rate approaching double digits, there is clearly an
unacceptable problem here."
The review found that doctors and other providers were paid $900 million
less than they should have received because of errors made by insurers. By
contrast, there were $20.8 billion in questionable overpayments, Medicare
said.
