In the never-ending healthcare merry-go-round, comes the latest news from Medicare which is, of course connected to our federal government, which is in turn funded by you and me.
In an interesting article appearing in the online The Fiscal Times (November 20, 2014), writer Brianna Ehley informs us that “Medicare Doles Out $45B in Improper Payments.” The $45 billion in improper payments was as part of Medicare’s Fee for Service for this year alone.
The article tells is that the $45 billion just from improper payments, has continued to rise from the paltry sum of only $28.8 billion in 2011. Ah, for the good old days of 2011.
The cash giveaway has something to do with what they call an error rate. In 2011, the error rate was 8.6 percent but this year takes the cake at a whopping 12.7 percent (by the way, in 2013 the error rate was 10.1 percent). Back in 2011 as well, the federal auditors drew a kind of government line in the quicksand. They felt comfortable that the error rate could be controlled at 8.6 percent. They were wrong.
Come one, come all
The article explains that (the italics are mine):
“Under Medicare’s Fee for Service model, doctors are paid for each treatment they provide to patients. The program covers Medicare (Part A) or ‘hospital insurance’ as well as supplementary medical insurance (Part B), according to the Health and Human Services Department. The improper payments tend to happen when a hospital bills Medicare for something that is not covered under the program, or if they overbill Medicare.”
I will try to explain all that highfalutin finance in a sentence or two:
Whenever they can, many physician’s offices, clinics and hospitals are over-billing for services either they knew weren’t covered, or just because. It stinks.
While we are trying to get our heads around the $45 billion, here’s another sobering set of facts:
“Two other programs, Medicaid and Foster Care, also reported error rates that increased from the error rates reported last year…In total, improper payments for seven HHS (Health & Human Services) programs cost about $78 billion in 2014, up from $65.3 billion last year (2013). That represents a 20 percent increase over one year.”
If there is any silver lining to this nightmare, it is that recovery of funds has improved and about 88 percent of the improperly billed funds have been recovered. Of course, it takes people; hundreds of them in hundreds of cubicles to recover these lost funds and to process them. That kind of stuff costs money too. By rough calculation, if 12 percent or so still goes uncollected, in the Fee for Service model alone, we are still talking close to a $5 billion loss per year. However, as I said, it is not just the money lost or the money reclaimed in these programs, but the entire infrastructure, the ponderous bureaucracy needed to retrieve the money.
The root of it all
This is not a healthcare problem per se, and it is not an auditing problem. It is an ethical problem. Offices are billing out for services they know will probably not be covered as are many hospitals. In addition to billing out for improper treatments, they are also over-billing because they somehow feel they are entitled to do so.
Who, ultimately pays for over-billing? It is again, the two of us; you and me.
Over-billing is wrong.
Over-billing is intentionally trying to trick someone into giving you more than you deserve. It’s something we are told is the domain of guys who slap a cheap roof on a house, or guys who wear toupees and cut-rate plaid suits who try to sell us a car with a busted transmission.
However, in all of these programs we mentioned, it is medical professionals and those in allied fields along with their administrators responsible for the over-billing. There is an ethical shift that we see far too often these days; there is “us,” and there is the big, bad government. There is no realization – again – that the government is supported by the taxpayers, and we are the taxpayers.
The amount of over-billing is rising from year-to-year and has so far shown no sign of abating. Perhaps hospitals and group practices are content to play a game of roulette. They will continue to over-bill and in greater and greater amounts, in the hope of escaping with more and more funds.
It is a cat and mouse game, except we are all mice. The trouble is, there is only so much cheese to go around.
