Wednesday, September 24, 2008

Billions Paid in Medicare Suspect Claims

The National Center for Policy Analysis reports that billions of taxpayer dollars have gone to waste because Medicare has paid out claims with blank or invalid diagnosis codes over the past decade according to a new Senate report.

Claims for wheelchairs, drugs, and other medical supplies of Medicare patients were reviewed from 2001 to 2006. During these years, they found at least $1 billion of medical equipment which listed diagnosis codes that had little or no connection to the reimbursed medical items. Here are some findings from the report:

  • Medicare paid millions of dollars to medical suppliers for blood glucose test strips -- used exclusively for diabetics -- based on non-diabetic diagnoses.
  • Roughly $4.8 billion in payments were made from 1995 to 2006 despite invalid coding or nothing listed at all; about $23 million of that amount was paid after 2003, when federal rules made clear the codes were required.
  • Based on a sample of 2,000 of those invalid coding claims, investigators found more than 30 percent could not be verified as legitimate and "bore characteristics of fraudulent activity."
  • Federal regulations require that Centers for Medicare and Medicaid Services (CMS) pay only for items that are deemed "medically necessary," yet, CMS does not examine diagnosis codes to determine whether the equipment is actually necessary before making payment.
  • Only 3 percent of claims are reviewed after payment is made.

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