GAO: Medicare responsible for 40% of government waste

Inappropriate payments through the Medicare program comprised about 40 percent of all government waste, according to a report by the Government Accountability Office (GAO).

According to data from the Centers for Medicare & Medicaid Services (CMS), there was $48 billion in improper payments from the Medicare program out of the $516 billion paid to physicians, hospitals, and other healthcare professionals in 2010. It topped the list of 70 federal programs the GAO tracked for improper payments. Inappropriate payments from fee-for-service Medicare represented $34.3 billion, with the remainder coming from Medicare Advantage's managed care program.

However, the GAO warned that the improper payment rate could be significantly higher because it did not include any data regarding Medicare's outpatient prescription drug program. Overpayment estimates may run in that program from the tens of millions of dollars to more than $5 billion a year.

CMS Deputy Chief Operating Officer A. Michelle Snyder told Congress during recent testimony that the Medicare program is developing a composite error estimate for Part D beginning with the 2011 fiscal year, reports American Medical News. Her testimony was given late last month before the House Oversight and Government Reform Committee.

However, Snyder insisted to lawmakers that Medicare payment errors are often the result of billing and administrative mistakes and not outright fraud. Snyder said that insufficient documentation, coding errors, and post-care judgments that services rendered were not deemed reasonable and necessary are the leading causes for overbilling, rather than outright fraud.

To learn more:
- read the American Medical News article
- read the GAO report

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