Medicare And Medicaid Dominate 'Improper Payments' By Feds

Here's a sure sign the White House wants to bury some news—hold a 6:45 p.m. conference call for reporters, with an embargo for 11:30 p.m.

Where does the money go? i i

Where does the money go? iStockphoto.com hide caption

itoggle caption iStockphoto.com
Where does the money go?

Where does the money go?


Those were the ground rules last night for the word that the annual accounting of "improper payments" made by the federal government. In fiscal 2009, the payments jumped to $98 billion from $72 billion in FY 2008. Here's a OMB chart breaking down the payments and a fact sheet on the whole mess.

Where did the money go? As usual, more than half the improper spending—$54.2 billion—was traced to problems with Medicare and Medicaid. And health-care spending overall remains a key driver of the federal deficit.

Now most people read improper payment and think fraud. That's not quite right. The federal term of art covers fraud, but also includes payments that aren't fully accounted for, or, in the case of health spending, may not be medically necessary.

In the call with reporters, White House Budget Director Peter Orszag was quick to try to explain away the increase. The overall number of course has gone up, he said, because overall federal spending rose in fiscal 2009. And in the health plans in particular, he added, the percentages rose as well (the Medicare fee-for-service improper spending rate more than doubled, from 3.6 percent to 7.8 percent), because Medicare officials imposed new, stricter standards for what constitutes a "proper" payment.

"A simple thing like an improper signature from a doctor is much more likely now to trigger a classification as an improper payment than it was last year," Orszag said.

None of that is likely to satisfy Republicans, who are certain to pounce on the numbers as more evidence that if Democrats can't manage Medicare, how can they be trusted to run an even larger chunk of the nation's health care system.

But Democrats will be able to fire back using the same report. Last year, for the first time, the improper payment rate for Medicare was divided between Medicare's traditional fee-for-service program and its privately-run Medicare Advantage program.

And this year the Medicare Advantage error rate also jumped — without any change in measurement methodology — from 10.6 percent to 15.4 percent.

Said Orszag, without a hint of irony, given the pitched battles in Congress over Democrats' efforts to cut tens of billions of dollars from the Medicare Advantage program, "this is one of the reasons why, as part of health reform, we believe that there are crucial changes necessary to the Medicare Advantage program."



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