With healthcare reform in the spotlight, this timely op-ed, written by HMS CEO Bill Lucia, appeared in the Richmond Times-Dispatch on Wednesday, June 27, 2012.
Recently, the Government Accountability Office (GAO) told Congress that “more needs to be done” to reduce improper payments due to waste, fraud, and abuse in Medicare and Medicaid.
That’s an understatement. Last year, Medicare alone made $43 billion in improper payments. Medicaid made an estimated $21.9 billion in improper payments in 2011.
The Affordable Care Act — the 2010 federal health reform law — took some major steps to help ensure that Medicare and Medicaid dollars are spent wisely. Unfortunately, those efforts may stall if the Supreme Court finds the more controversial parts of the act unconstitutional this week.
Regardless of what happens to the rest of the health care law, lawmakers from both parties should be able to agree to preserve its “program integrity” provisions, which are expressly designed to prevent fraudulent or wasteful payments within Medicare and Medicaid — and thereby protect taxpayer dollars.
Ensuring the integrity of Medicare and Medicaid spending is so difficult because of the sheer volume of payments the two programs remit. Medicare, for instance, pays more than a billion separate claims each year to more than a million different providers.
Lots of payments can mean lots of opportunity for errors to slip through unnoticed.
In congressional testimony last year, one convicted fraudster told federal legislators that swindling Medicare out of more than $9 million had been “incredibly easy.” The “primary skill required to do it successfully,” he said, “is knowledge of basic data entry on a computer.”
To help fight fraud, Medicare has been running a Recovery Audit Contractor (RAC) program since 2005. Under this program, independent contractors evaluate Medicare’s spending and recover erroneous payments. As part of a demonstration project covering just three states, the program saved roughly $900 million in its first three years of operation.
Since October 2009, when the Medicare RAC program went into full effect across the whole country, it has collected more than $1.2 billion in overpayments.
Portions of the Affordable Care Act aim to expand this same sort of budget-minded, independent oversight to Medicaid.
Thus far, 25 states have established Medicaid RAC programs. The potential savings are significant — up to $110 million this year and more than $2.1 billion during the first five years of their operation.
Because Medicaid is jointly financed by both the feds and the states, $900 million in savings are expected to be returned to states to help them shore up their ailing budgets.
Those are the sorts of savings that politicians from both red and blue states can get behind.
The health reform law also contains several other common-sense provisions to reduce wasteful Medicare and Medicaid spending. For instance, health providers will be required to report overpayments within 60 days of their identification. They’ll also be subject to enhanced background and licensure checks — and will have to file claims within a year.
These are basic and necessary checks on the financial well-being and integrity of Medicare and Medicaid. They are also the sort of basic checks on fraud and abuse that the two programs have long lacked. They should not be casualties of the legal and political battle over the law.
The GAO has listed Medicare as a program at “high risk” for fraud for more than two decades. The federal watchdog has also released more than 150 reports noting the program’s fiscal deficiencies. Medicaid has been tagged as “high risk” for nine years.
The Supreme Court’s ruling this week on the Affordable Care Act is not likely to quell the controversy that has enveloped the law since its passage. But its efforts to protect the integrity of Medicare and Medicaid — not to mention the billions of taxpayer dollars the programs spend — should stand above reproach whether the law stands or not.
Tags: ACA, cost containment, fraud, Healthcare Reform, waste and abuse