Medicare Fraud Rate Higher than Originally Thought

It seems like Medicare continues to have more problems when it comes to keeping records, fraud and audits.  We recently reported that there had been an inspection by the Inspector General’s office regarding overpayments, payments for false claims and fraud.  That investigation, by the Human Services inspector general’s office originally uncovered what seemed to amount to about $700 million.

The Medicare Officials that conducted the investigation gave these figures.  There is only one problem – the information was based on faulty statistics.  In fact, the way that Medicare officials conducted the investigation went directly against Medicare rules. 

What was supposed to happen was that the billing be matched against purchases, medical records and orders from doctors.  They were not handled this way.  They were matched against purchases, but limited medical records in only some of the cases and they were essentially not matched against orders from doctors at all.  The end result is that many phony purchases were matched against phony billing, leaving much of the substantiating information out of the equation.

As a result of the way that this was handled (remember the fox watching the hen house), Medicare officials investigated their own information and came out with a faulty figure.  They determined that the $700 million in fraud that they gave as their figure amounted to about a 7.5% fraud rate.

When looking at the true figures, however, it is actually estimated that the total amount in fraud is actually over $1 billion.  The federal report said that if the Medicare officials had made the auditors abide by the rules, the amount of incorrect or fraudulent billing would have been much higher, resulting in the $1 billion mentioned.

With Medicare having the financial problems that we continue to hear about, $700 million was bad enough.  Now we are looking at $1 billion.  It seems that $1 billion would pay for a lot of prescriptions that the Medicare Advantage donut hole is swallowing up. 

Filed under: General-Medicare

Tags: CMS, General-Medicare, medicare audits, medicare fraud, medicare officials