WASHINGTON -- In the first comprehensive audit of Medicare, federal investigators said yesterday that the government overpaid health care providers last year by $23 billion, or 14 percent of all the money spent in the standard Medicare program.
The books and records of the Medicare agency and its contractors were in such disarray that they could not be thoroughly audited, said June Gibbs Brown, inspector general of the Department of Health and Human Services. She said there was no way to tell how much of the overpayment resulted from fraud.
The estimate of improper payments, based on an exhaustive review of a sample of actual claims, is much higher than prior estimates by health policy experts. It tends to confirm elderly people's allegations that their Medicare bills are riddled with errors.
The amount of improper payments detected by the inspector general is, by coincidence, the same as the amount of savings to be extracted from Medicare under the budget bill pending in Congress -- $115 billion over five years, an average of $23 billion a year.
Congress is considering major changes in Medicare, including a "means test" and a higher age of eligibility, to prevent the program from going bankrupt before baby boomers need it.
In her report, the inspector general said: "We estimate that during fiscal year 1996 net overpayments totaled about $23.2 billion nationwide, or about 14 percent of total Medicare fee-for-service benefit payments. These improper payments could range from inadvertent mistakes to outright fraud and abuse. We cannot quantify what portion is attributable to fraud."
The report said the government had no reliable way to prevent or detect improper Medicare payments, and no reliable estimate of what it might owe on unpaid claims.
Medicare officials acknowledged last night that the government made substantial erroneous payments but said they did not get credit for all the proper, accurate, timely payments they made.
Pub Date: 7/17/97