Two new reports paint dark Medicare picture

Two recent audit reports offer further evidence that the federal government has targeted home care as its fraud-and-abuse whipping boy.

One audit found all providers were overpaid by $23.3 billion. Home health’s portion amounted to approximately 17% of the total overpayment.

A second report, disclosed in congressional testimony by George F. Grob, deputy inspector general of the Department of Health and Human Services, claims that 40% of Medicare home health visits in four states should not have been reimbursed. This far exceeds the most recent figure of 14% for unnecessary payments as calculated by the government. The states involved are California, New York, Texas, and Illinois, already targets of Operation Restore Trust (ORT) investigations.

According to Inspector General June Gibbs Brown, the $23 billion in overpayments represents about 14% of the $168.6 billion in processed Medicare fee-for-service payments reported by HCFA.

According to that report, about one in three of the claims audited contained mispayments, with an average payment error of $670. About 46% of Medicare payment claims were improperly documented. More than one-third involved services that were found not to be medically necessary.

The OIG report noted four internal control weaknesses:

• HCFA doesn’t have a process for estimating a national error rate for improper payments.

• HCFA doesn’t have an acceptable method for estimating Medicare accounts payable for financial statement reporting purposes.

• HCFA doesn’t have an integrated financial reporting system to properly account for Medicare accounts receivable and other financial management and reporting issues.

• HCFA’s central office in Baltimore has deficiencies in electronic data processing controls relating to security access, system application development, and service continuity.