Medicare Costs And Fraud

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 peoĀ­ple would be surĀ­prised to hear that governĀ­ment healthcare programs are ā€œtrust-basedā€ sysĀ­tems that rely on the good faith of medĀ­ical providers to bill only for leĀ­gitĀ­iĀ­mate serĀ­vices. The government does litĀ­tle to asĀ­sess the leĀ­gitĀ­iĀ­macy of a claim beĀ­fore payĀ­ing it. The results can be strikĀ­ing…

CMS reĀ­ceives about 4.4 milĀ­lion Medicare claims a day, but there isnā€™t a cenĀ­tral loĀ­caĀ­tion for reĀ­ceivĀ­ing and anĀ­aĀ­lyzing them. InĀ­stead, a hodgeĀ­podge of priĀ­vate conĀ­tracĀ­tors is reĀ­sponĀ­sible for payĀ­ing difĀ­ferĀ­ent types of Medicare claims from difĀ­ferĀ­ent regions of the counĀ­try. Separate conĀ­tracĀ­tors are responĀ­siĀ­ble for reĀ­viewĀ­ing those claims to idenĀ­tify fraud, but only afĀ­ter theyā€™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 ā€œMedicare Benefit Policy Manual,ā€ 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 podiatristā€™s statement that the diagnosing and treating M.D. or D.O. also concurs with the podiatristā€™s findings about the severity of the peripheral
involvement indicated.

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? šŸ˜œ


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