The Obama administration’s efforts to crack down on bogus Medicare payments have ended up sweeping in too many “good actors” who get ensnared in a costly and tedious appeals process, House lawmakers said Tuesday.
While tackling Medicare fraud is worthwhile, they said the process in place rewards auditors for flagging cases and collecting penalty payments, leaving health providers to file an appeal and wait, sometimes more than two years, to have their case cleared and get their money back.
Lawmakers said some health providers have become reluctant to take seniors on Medicare.
“The Recovery Audit Contractor program may have been well-intentioned, but there have been unintended consequences,” Rep. Steven Horsford, Nevada Democrat, said at a hearing held by House Oversight’s subcommittee on health.
Medicare pays for one-fifth of health care services nationwide but is on track for financial depletion by 2026, so cracking down on fraud and abuse is paramount, according to subcommittee Chairman Rep. James Lankford, Oklahoma Republican.
But there is a massive backlog of about 460,000 appeals that must be reviewed by administrative law judges once recovery auditors flag potentially improper payments, he said.
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“Not many businesses can survive having their money held for 28 months while they wait [for the process] to decide if they’re actually going to get reimbursed,” Mr. Lankford said.
Shantanu Agrawal, deputy administrator for program integrity at the Centers for Medicare and Medicaid Services, said the agency is trying to find a balance between protecting the program’s integrity and trying to lower the burden on providers.
He said the agency is taking steps to make sure the appeals process is fair and not cumbersome, although lawmakers frequently sparred with Mr. Agrawal over how long it is taking for the government to reform the process.
The Government Accountability Office issued a report Tuesday that said the government should try to stop improper payments before they go out the door.
It also said that while the percentage of Medicare claims requiring post-payment review remains quite small, the overall number of reviews is increasing and contributing the backlog of appeals.
Brian P. Ritchie, an official at the Health and Human Services Department’s inspector general’s office, said Medicare should clarify its rules so providers understand their obligations.
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“All fraud is certainly improper payments, but all improper payments are not fraud. And most of these providers are not committing fraud, they just don’t understand a complex system,” he told the House panel.
Government officials and contractors have made progress in recouping fraudulent payments overall — reeling in nearly $6 billion through audits and investigations and saving more than $19 billion as a result of legislative and regulatory actions in fiscal 2013, he said.
Yet there is ample room for improvement. Improper payments costs taxpayers and beneficiaries about $50 billion each year, he said, and inappropriate prescribing and billing for unnecessary drugs is a persistent problem.
He also said a third of home health-services claims did not satisfy an Obamacare provision requiring practitioners to document face-to-face encounters with the Medicare patients they certify.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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