A familiar marketing tool touting the number of hamburgers served by a fast food chain came to mind recently when the federal government issued its annual performance survey for Medicare.
It’s obviously the restaurant’s strategy to remind Americans about the popularity of its all-beef-patty sandwiched in a bun. Sales climb into the billions.
But unlike the iconic hamburger joint, Medicare can’t be proud to advertise why it reached 20 billion.
According to a government survey, nearly 20 billion Medicare dollars were wrongfully paid out in fiscal year 2004 to health care providers. The nation’s health insurance program for the elderly and disabled contracts with private insurers to pay more than 1 billion claims each year.
The 9.3 percent payment error is based on the audit of 160,000 claims. The improper payments represent claims reimbursed by Medicare despite being medically unnecessary, inadequately documented or incorrectly coded. Some providers who were asked for documentation to back up the claims did not reply.
Now $20 billion is a lot of money, especially considering the long-term financial pressures facing Medicare. Millions of older Americans and disabled individuals rely on Medicare for health care insurance. As the nation’s baby boom population reaches retirement, the financing needs will escalate even more.
As chairman of the Senate Finance Committee, which has primary oversight and legislative authority over Medicare, I find it unacceptable when improper reimbursements approach an error rate hovering near the double digits.
Looking on the bright side, at least the magnitude of the problem has been identified. The Centers for Medicare & Medicaid Services (CMS) now is reviewing more claims than ever before and is taking steps to crack down on providers who fail to provide the necessary documentation. Moreover, the performance is slightly improved from last year.
Nevertheless, the level of improper payments must improve dramatically. Medicare needs to work aggressively to tighten accountability standards, enforce better quality controls and nip these improper payments in the bud. Such sloppy billing practices jeopardize Medicare’s ability to treat a growing number of beneficiaries. It’s a slap in the face to every Iowan who contributes a percentage of every hard-earned paycheck into the Medicare trust fund.
From my leadership post on the Senate Finance Committee, I’m also closely tracking the implementation of the new Medicare benefits available in 2006. The administration unveiled in January its map of the 26 coverage regions that will offer Medicare Advantage Preferred Provider Organizations and 34 regions in which prescription drug plans will compete for the prescription drug business among the 42 million Medicare beneficiaries across America.
As a main architect of Medicare’s first-ever prescription drug benefit, I insisted that coverage must offer competition by private insurers to help drive down costs and offer the best benefits possible regardless if the beneficiary lives in rural or urban areas of the country.
In the first 12 months since its enactment, the landmark new Medicare law is working to provide better benefits and real savings to folks who rely on Medicare.
Starting in January, the new law will offer first-ever preventive benefits, including a "Welcome to Medicare" physical for new beneficiaries. Enrollment for the voluntary, comprehensive new drug benefit will begin this fall.
From fixing improper payments to establishing competitive coverage regions that will offer comprehensive prescription drug plans, I’m keeping close tabs on Medicare officials to make sure they get it right.
I want to help make it possible for Medicare to advertise that it serves 42 million satisfied customers. And counting.