health care News

WASHINGTON (AP) -- Medicare lost $13.5 billion last year because of fraud, waste and mistakes, translating to about 8 cents for every dollar spent, government auditors said Thursday.

That's slightly higher than the $12.6 billion in losses in 1998, but remains down significantly from losses in the $20-billion range in previous years by the federal health insurance plan for the elderly and disabled.

Nancy-Ann Min DeParle, administrator of the Health Care Financing Administration, which runs Medicare, said a crackdown on fraud that began in 1993 is continuing to stem program losses.

``These results show that our progress is not a one-time phenomenon but something sustainable on which we can build,'' said DeParle, testifying before a Senate appropriations subcommittee.

Sen. Tom Harkin, D-Iowa, said lawmakers want to see further declines in Medicare's losses, noting, ``by any measure, $13.5 billion in losses is unacceptable.''

One troubling finding in the 1999 audit was a big increase in documentation errors -- one of the most pervasive problems in the program.

Documentation errors -- when there's little or no paperwork to determine whether services billed for were actually performed -- caused $5.5 billion in losses. In 1998, those losses were $2.1 billion.

DeParle said HFCA is testing new documentation guidelines and is expanding education programs to help providers file claims correctly.

While last year's estimate of total losses was higher than in 1998, auditors concluded that results for the two years are similar, statistically speaking, because they are based on randomly selected claims that may have had a higher dollar value in 1999 purely by chance.

Auditors with the Department of Health and Human Services Inspector General's office reviewed 5,223 claims from 1999 valued at $5.4 million. Of those, they found problems with 1,034.

Based on the dollar value of the sample bills, auditors estimate that overall, Medicare paid out $13.5 billion it shouldn't have. That's 7.97 percent of the $169.5 billion Medicare paid directly to medical providers, including doctors and hospitals. Billing through HMOs that participate in Medicare is excluded. In 1998, the error rate was 7.1 percent.

``We cannot conclude that the current error rate is statistically different,'' said Inspector General June Gibbs Brown.

In 1996, the first year the comprehensive Medicare audit was done, overpayments accounted for 14 cents of every dollar spent, or $23 billion. In 1997, 11 cents on the dollar, or $20 billion, was lost.

Brown also renewed an offer on Thursday to go easy on health care providers who voluntarily confess to fraud or billing mistakes, pledging not to kick them out of Medicare if they can show they have fixed the problems.

``We want to encourage providers to come forward and disclose conduct that threatens federal health care programs,'' Brown said in a letter to providers. A leniency program for those who turn themselves in began in 1998.

The 1999 Medicare audit showed that documentation errors occurred mostly at home health agencies, medical equipment suppliers and doctors' offices.

Documentation errors and medically unnecessary procedures have accounted for $54.8 billion, or 70 percent of the $69.5 billion in improper payments made during the four years that HHS has been tracking Medicare's error rates, auditors estimate.

On the Net: the Medicare audit at the HHS Inspector General's site: http://www.hhs.gov/oig/new.html

Copyright © 2000 Associated Press Information Services, all rights reserved.