[Congressional Record Volume 142, Number 55 (Thursday, April 25, 1996)]
[Senate]
[Page S4194]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCAIN:
  S. 1704. A bill to provide for the imposition of administrative fees 
for medicare overpayment collection, and to require automated 
prepayment screening of medicare claims, and for other purposes; to the 
Committee on Finance.


             the medicare overpayment reduction act of 1996

 Mr. McCAIN. Mr. President, today I am introducing an 
initiative to address Medicare overpayments--a serious problem which is 
depriving the trust fund of billions of dollars every year.
  I'd like to thank Martha McSteen, president of the National Committee 
to Preserve Social Security and Medicare, and her talented staff, for 
their invaluable efforts and continued support of this important 
crusade.
  Today, I introduce the Medicare Overpayment Reduction Act. This bill 
imposes an administrative fee on providers who submit inaccurate 
Medicare claims and are overpaid by the Health Care Financing 
Administration. The fee will be equal to 1 percent of the overpaid 
amount, and is intended to discourage overpayments and to offset the 
cost of recovering them.
  In addition, the bill will require the Health Care Financing 
Administration to screen claims for accuracy, before payment is made, 
for certain procedures and services where there is a high rate of mis-
billing.
  Hospitals, and other providers under Medicare Part A, are prepaid 
annually by HCFA for anticipated Medicare expenditures. Currently many 
hospitals grossly overestimate their Medicare funding needs and use the 
overpayment to subsidize their non-Medicare operations. This is an 
abuse and it must stop. The legislation will impose the administrative 
fee if a hospital overestimates its Medicare needs by more than 30 
percent, and does not repay the overage within 30 days.
  Doctors, on the other hand under part B, submit claims for services. 
Sometimes claims are submitted for services that were never provided, 
or that are incorrectly coded in order to receive greater payments. The 
fee will discourage this activity and help us recoup the cost of 
seeking reimbursement.
  Moreover, prepayment screening will help eliminate overpayments from 
occurring in the first place. Prescreening technology is readily 
available and used extensively in the private sector, and we should use 
prescreening to improve Medicare payment accuracy.
  It should come as no surprise to my colleagues, or to any interested 
citizen, that the Medicare system is in serious condition. It is 
estimated that Medicare funds will be exhausted by the year 2002. The 
Washington Post today reported that the trust fund is in worse shape 
than previously thought.
  We have an obligation to take every step we can to protect the trust 
funds and ensure their health and viability for this and future 
generations.
  While overpayments are not the only problem with Medicare, they are a 
significant problem. GAO reports that last year over $4.1 billion was 
overpaid from the trust funds. Had this bill been in effect last year, 
I would submit that a healthy portion of these mis-billings and 
overpayments might not have occurred and even if they had, we would 
have been able to recoup over $15 million from imposing the 
administration fee.
  While this bill is not a panacea, it is a step in the right direction 
in the effort to discourage overbilling, and to recoup recovery costs 
in every instance.
  Overpayments are costly, unnecessary and wasteful. They contribute to 
the Medicare solvency problem and they must be stopped. This bill will 
help.
  Again, I want to thank Martha McSteen, her staff and the membership 
for their continued support of the effort to help protect and preserve 
the future of the Medicare program, and for their leadership on this 
legislation.
                                 ______