Feds say FPS, prior authorization key to reducing improper Medicare payments

U.S. Capitol with flag

Photo credit: Getty/Andrea Izzotti

Officials with the Department of Health and Human Services used a congressional hearing to highlight the use of new tools aimed at reducing Medicare improper payments, even as lawmakers criticized the agency’s efforts within other federally run healthcare programs.

During a hearing last week before the House Subcommittee on Government Operations, HHS Deputy Chief Financial Officer Sheila Conley testified that the agency was able to reduce improper payments within the Medicare fee-for-service program by $2 billion between the fiscal years 2014 and 2015 through new data analytics initiatives and prior authorization for certain services.

“We’ve learned that our efforts to reduce improper payments must be strategic, multifaceted and continuous,” she said. “To that end, we’re pursuing three approaches that deliver results: Leveraging technology, strengthening key partnerships and exploring innovative solutions.”

Specifically, Conley highlighted the impact of the Centers for Medicare & Medicaid Services’ Fraud Prevention System, which has saved $1.5 billion since 2011, a $11.60 return for every dollar spent, according to previous reports. Conley also pointed to stronger partnerships between federal and state agencies and the use of prior authorization--a tactic favored in the private sector--for power wheelchairs, durable medical equipment and ambulance services. Recently, CMS walked back attempts to initiate prior authorization for home health claims, opting instead for a pre-claims review.

CMS has previously reported that this layered approach to fraud saved both Medicare and Medicaid $42 billion in fiscal years 2013 and 2014, a number that appears inflated

Lawmakers were less impressed with Medicare’s improper payment decline, noting that the bad news is several other government-run programs--including Medicare Advantage, Medicaid and Medicare Part D--reported higher improper payment rates in 2015. Rep. Mark Meadows (R-N.C.) called on Conley to submit specific ways in which HHS plans to reduce improper payment rates in the coming year.