Administration Claims $17.6 Billion 'Improper' Federal Program Payments Cut

The Obama administration said Tuesday that it has, over the past year, eliminated $17.6 billion worth of improper payments by federal programs and introduced four new initiatives to prevent health care fraud. The administration also said that in the two years since the president's executive order to enhance fraud prevention efforts, its Campaign to Cut Waste has avoided more than $20 billion in improper payments in Medicare, Medicaid, Pell Grants, and Food Stamps. Consequently, officials said, agencies are on track to meet the goal of preventing $50 billion in payment errors by the end of 2012. Among specific achievements cited by the administration, the overall error rate for Medicare programs has decreased from 10.2% in 2010 to 8.6% in 2011, saving $7 billion in Medicare fee-for-service payment errors and $5 billion in Medicare Advantage. A composite error rate of 3.2% for the Part D prescription drug program—lower than the government-wide error rate of 4.7%—has been achieved as well. Additionally, the Medicaid error rate has dropped to 8.1% this year from 9.4% in 2010, resulting in the avoidance of about $4 billion in payment errors since 2009. Meanwhile, topping the roster of pilot programs introduced to reduce the error rate in Medicare and Medicaid is an initiative wherein private inspectors are permitted to catch wasteful spending before it occurs by expanding the use of Recovery Audit Contractors to screen certain hospital payments before they are made. Under the umbrella of a second program, hospitals may, rather than wasting time and money on appeals for rejected bills, resubmit the latter to Medicare for certain services when an error is made. Another pilot program permits the U.S. Department of Health and Human Services (HHS) to review certain medical equipment claims before they are made. A fourth program, in line with partnerships with states, improves fraud detection by testing an automated tool to screen providers for the risk of fraud.