Senate Finance Committee Discusses Issues Related to Improper Payments in Federal Programs, Including Medicare and Medicaid
Some Raise Concerns about Erroneous Medicare Denials and the Backlog of Appeals
October 6, 2015 10:18 AM
The United States Senate Finance Committee held a hearing on Thursday, October 1, to discuss issues related to improper payments in federal programs, including but not limited to Medicare and Medicaid. The hearing followed the issuance of a report earlier this year by the Government Accountability Office (GAO) that estimated for fiscal year 2014 a total of $124.7 billion in improper payments spanning 124 programs and 22 agencies, up from $105.8 billion in fiscal year 2013. In his testimony at the hearing, GAO Comptroller General Gene L. Dodaro stated that the “almost $19 billion increase was primarily due to the Medicare, Medicaid, and Earned Income Tax Credit programs, which account for over 75 percent of the government-wide improper payment estimate.” GAO found that in FY 2014 the Medicare program paid out nearly $60 billion in improper payments, and Medicaid paid out approximately $17.5 billion in improper payments. An improper payment, according to GAO, is defined by statute “as any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements.” GAO’s full testimony and recommendations are available here.
Chairman Orrin Hatch (R-UT) expressed concerns about the amount of improper payments, and emphasized the need to address them. “While these numbers – by their sheer size – are staggering, none of them should be surprising,” Chairman Hatch stated. “This is a problem that has been many years in the making. And, if you ask me, the time for addressing them is long past due.”
Other lawmakers discussed the importance of preventing improper payments, while also stating the importance of preventing more burdensome regulations on health providers. Ranking Member Ron Wyden (D-OR) said “there is action that can be taken” to prevent improper payments, but he emphasized the need to “strike a balance so as not to create a lot of new regulatory burdens and hassles for the overwhelming number of providers who are honest and scrupulous.” Dodaro responded that the goal is to have an “integrated strategy” that “prevents improper payments in the first place.” He said that CMS is not doing enough on the front end.
Senator Pat Roberts (R-KS) referred to the current system as a “byzantine regulatory process” and expressed concerns about the backlog of appeals. “Obviously, our auditing needs improvement,” he said, but “part of that is also causing a tremendous burden on providers who are trying to be responsive. Not all providers are guilty of whatever some auditor says that they are.” Senator Debbie Stabenow (D-MI) similarly raised that fact that underpayments are also an issue, and she said it is import to support those providers that act in good faith.
Earlier this year, the National Association for Home Care & Hospice (NAHC) submitted testimony for a previous hearing that included the following recommendations as a means to reduce erroneous claim denials and resulting appeals:
CMS should take all necessary steps to improve the quality and accuracy of initial claim determinations to limit the need for an administrative appeal;
CMS should monitor its contractors that handle early-stage administrative appeals to ensure a high degree of accuracy and to reduce the number of appeals that end up before an ALJ;
CMS should provide a settlement option to all appellants with claims pending before an ALJ in order to reduce the backlog. That settlement should be based on historical data on ALJ reversal rates and the cost savings achieved by Medicare coming through the avoidance of an ALJ appeal; and
OMHA should increase its resources to handle the level of demand and establish alternative dispute resolution processes to resolve some appeals.
The Senate Finance Committee subsequently approved draft legislation to address the backlog, the Audit & Appeal Fairness, Integrity, and Reforms in Medicare (AFIRM) Act of 2015 (see previous NAHC Report article here).
For more information about last week’s hearing, please click here.