You have probably heard the argument in favor of a government-run health care system that touts the low administrative costs associated with Medicare; more efficient than the private sector they say. Two things you should know; first those reported costs do not include all the costs of running Medicare because some costs are charged to other departments and second and most significant is the following:
Each year the Centers for Medicare and Medicaid Services pays more than $853 billion in health-care claims, amounting to almost 25% of the federal budget. But an estimated 10% of the claims paid are fraudulent. This year alone, the federal government will pay about $85 billion in fraudulent claims. That is more than the combined earnings of Exxon, Wells Fargo and Microsoft…
Most people would be surprised to hear that government healthcare programs are “trust-based” systems that rely on the good faith of medical providers to bill only for legitimate services. The government does little to assess the legitimacy of a claim before paying it. The results can be striking…
CMS receives about 4.4 million Medicare claims a day, but there isn’t a central location for receiving and analyzing them. Instead, a hodgepodge of private contractors is responsible for paying different types of Medicare claims from different regions of the country. Separate contractors are responsible for reviewing those claims to identify fraud, but only after they’ve been paid.
Wall Street Journal 11-6-15
Not enough money is spent on claim review!
Here is an example of the trust-based approach for routine foot care from the Medicare workbook for providers:
Presumption of Coverage for Routine Services
Upon evaluating whether routine services are reimbursable, a presumption of coverage may be made where the evidence available shows certain physical and/or clinical findings are consistent with the diagnosis and indicate severe peripheral involvement. Please refer to the “Medicare Benefit Policy Manual,” Chapter 15, Section 290, for more information about applying this presumption.
When the routine services are rendered by a podiatrist, the Medicare Fee-For-Service (FFS) contractor may deem the active care requirement met. However, the claim or other available evidence must indicate that the patient has seen an M.D. or D.O. for treatment and/or evaluation of the complicating disease process six months before the routine-type services were rendered.
The Medicare FFS contractor may also accept the podiatrist’s statement that the diagnosing and treating M.D. or D.O. also concurs with the podiatrist’s findings about the severity of the peripheral
The result is that many seniors without specific medical conditions routinely have their toenails clipped.
In a backhanded defense of Medicare, it does what Americans expect; pay my claims and don’t ask questions. After all, isn’t claims management and scrutiny one of the major complaints against health insurance companies? 😜