Medicare Fraud Puts 'Waste Patrols' on Alert First Comprehensive Report Shows as Much as $23 Billion of Waste and Fraud Each Year

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Sen. Joseph Biden (D) of Delaware says he rarely goes to a town meeting in his small state without a senior citizen standing up to complain about something wrong in his or her Medicare bill.

Once, a woman in Middletown brought in the bill from her husband's 21-day hospital stay. The hospital had incorrectly billed Medicare for 36 major X-rays. "And Medicare paid it," Senator Biden says.

So he wasn't surprised when an audit of Medicare by the inspector general of the Department of Health and Human Services (HHS) - the results of which were released yesterday - found that between 11 percent and 14 percent of the Medicare fund is lost each year to payment mistakes and outright fraud. That's between $17 billion and $23 billion, higher than earlier estimates. The audit - the most comprehensive ever of the Medicare program - is likely to add fuel to the emotional debate over how best to save the Medicare trust fund, which is headed for bankruptcy at the turn of the century if current trends continue. Opponents of Senate-proposed changes will argue that recouping $23 billion annually would make those changes unnecessary. In addition to proposing specific reforms to target waste, lawmakers and HHS are trying to harness vigilance by senior citizens to fight abuses. They've authorized pilot "Medicare Waste Patrols" in 12 locations, enlisting retired accountants, health professionals, and businesspeople to help other seniors identify problems in their Medicare bills and report them. "Perhaps our strongest allies are the seniors," says Sen. Jack Reed (D) of Rhode Island, one of the sites for the experiment. "Frankly, they know where {fraud} happens and they'll be able to help us." The inspector general's audit sampled 5,300 claims paid in 1996 from all 10 regions of the country and for a range of services. It found that 1 out of every 3 claims contained a mispayment; the average error was $670. The errors were not all simple mistakes by health-care providers. Forty-six percent of the bad claims were improperly documented; 36 percent involved services that were not medically necessary; and 8 percent were caused by providers using the wrong billing code. "The CIA has a secret budget, a black budget - and now it seems Medicare has a black-hole budget," says Sen. Tom Harkin (D) of Iowa, who has long fought Medicare waste. As a short-term fix, the balanced-budget deal calls for $115 billion in cuts in projected Medicare spending over five years - equivalent, coincidentally, to the amount the report suggests would be lost through waste and fraud in the same time period. …

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