Medicare, Medicaid Overpayments Swell

WASHINGTON — The federal government racked up $98 billion
in improper payments to a variety of agencies in fiscal 2009,
including $54.2 billion that went to Medicare and Medicaid
providers, according to Peter R. Orszag, director of the Office of
Management and Budget.

In a blog on the OMB Web site, Orszag noted that figure
reflected a $26 billion increase over the $72 billion that
the government improperly paid out in 2008. He attributed the
double-digit increase to “improved detection and the significant
increase in federal outlays associated with the economic
downturn.”

The OMB identified payment errors in 12 programs, including the
Department of Health and Human Services, in which payment error
rates for Medicaid jumped 9.6 percent, to $18 billion, while
Medicare fee-for-service rates grew 7.8 percent, to $24 billion.
Improper payments to Medicare Advantage Plans showed a troubling
trend, ballooning 15.4 percent, or $12 billion, Orszag said.

Orszag did not say what percentage of the errors constituted
fraud, but in a late evening press call on Tuesday, he noted that
some of the errors were misdirected payments due to a physician’s
illegible signature or to inadequate documentation.

In any case, he said, “We can no longer tolerate these errors,
mistakes and misdeeds … Every dollar misspent is a dollar not
going to help an unemployed worker, a family in need of help buying
groceries or a senior who relies on Medicare to stay healthy.”

The figure was alarming enough to trigger a response from the
White House. To combat future improper payouts, Orszag said
President Obama will soon sign an executive order “to rein in these
improper payments so that the right people receive the right
payment amount for the right reason.”

Orszag laid out a series of steps the administration is pledged
to carry out that were designed, he said, “to bring the bright
light of public scrutiny to these errors.”

Among them:

• Create an online dashboard of key indicators and statistics so
  that everyone can access information on improper payments, view
  payment error rates by agency and program, and see a list of the
  most egregious actors.

• Create and publicize a single mechanism — such as a Web
  site or email — for the public to report suspected waste,
  fraud or abuse.

• Require agencies to establish more frequent error reduction
  targets (e.g., semiannual targets in addition to annual targets),
  and more frequent error measurement for certain high-priority
  programs.

• Issue recommendations on ways to measure program access for
  intended beneficiaries and make that information publicly
  available.

Orszag also said the administration will establish methods to
hold agencies accountable for waste. He said the administration
will:

• Require each agency to designate a Senate-confirmed appointee to
  be accountable to the president for meeting improper payment
  reduction targets and consolidating program integrity
  activities.

• Require that all targets for improper payments show reduction
  and/or improvement and share the agency’s measurement methodology
  and plans for meeting the reduction targets with the agency’s
  Inspector General.

In an effort to improve eligibility verification and prepayment
scrutiny, the administration will also concentrate on sharing data
among agencies, states and localities “so if one agency stops
payment to an individual due to non-eligibility, other agencies
learn of the stop payment before paying the same individual,”
Orszag said.

Orszag said the administration would also create incentives for
compliance and for reporting payment errors, such as allowing
states to recoup more federal grant dollars.

According to officials, President Obama is expected to sign the
order containing the steps to curb improper payments with a
week.