Har­ried hos­pi­tals say the grow­ing num­ber of billing au­dits they face could ac­tu­ally in­crease costs

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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.

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