BANK ERROR NOT IN YOUR FAVOR
Harried hospitals say the growing number of billing audits they face could actually increase costs
Provider wary of pre-emptive audits aimed at stopping overpayments before they happen /
Expanded and more aggressive accounting has cut the rate of improper payments in Medicare and Medicaid, according to the Obama administration, but providers worry they’re bearing increasing costs from those initiatives. The concerns may grow more acute as political pressure and new initiatives accelerate the government’s drive to reduce improper payments.
The administration last week claimed $12 billion in savings in fiscal 2011 from a range of measures used to track the rate and total dollar amount of improper payments under the biggest and growing federal healthcare programs.
Such reductions not only demonstrate progress on a key administration goal but follow the narrative used by many Democrats that efficiencies, payment controls and fraud enforcement can control the growth of the programs, while skirting discussion of acrossthe-board cuts or changes that would more directly affect payments to providers or benefits and eligibility for enrollees.
“We have to tackle the issue of why healthcare in America is so expensive—why we end up spending twice as much per person on healthcare than do the people of every other industrialized country,” Sen. Bernie Sanders (I-VT.) told Modern Healthcare. “So I think what we need to do is get rid of a lot of waste and bureaucracy and administrative costs in healthcare.”
But the clear political logic of aggressively cutting so-called improper payments looks much grayer from the perspective of many providers, who see both growing costs from compliance and the unintended consequence of increasing overall healthcare spending.
“When you get into the nuts and bolts of some of these programs, you realize it’s not as easy as taking the overpayment line out of the budget,” said Michael Regier, senior vice president of legal and corporate affairs for VHA.
The Obama administration announced on Nov. 14 that it was on course to deliver on a 2010 promise to cut Medicare’s fee-for-service error rate in half by the end of fiscal 2012. The rate dropped to 8.6% of payments in fiscal 2011, which ended in September, from 10.8% in 2009, the base line year.
The fee-for-service improper payment rate is one of several tracked by the administration in the Medicare and Medicaid programs, which make up nearly a quarter of all federal spending and are highly vulnerable to paying claims with errors, both intentional and not. The CMS also tracks error rates in the Medicare Advantage program, which the administration said dropped to 11% in fiscal 2011, an improvement of 3 percentage points that saved $5 billion.
Another measure of success in reducing improper payments that administration officials recently touted was the $4 billion recovered by antifraud efforts in fiscal 2011.
Such commingling of accidental overpayments or misdirected payments with outright fraud in public campaigns to reduce improper payments is seen by some providers as sympto-
The CMS’ Budetti testified earlier this year that most payment errors stem from mistakes in billing, and don’t necessarily mean that the CMS shouldn’t have spent the money.