[Congressional Record Volume 143, Number 13 (Wednesday, February 5, 1997)]
[Senate]
[Pages S1020-S1021]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCAIN:
  S. 267. 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 1997

  Mr. McCAIN. Mr. President, today I am introducing legislation which 
addresses a very serious problem in the Medicare system--Medicare 
overpayments. Medicare overpayments are costing the Medicare trust 
funds billions of dollars each year.
  This bill imposes an administrative fee on providers who submit 
inaccurate Medicare claims and are overpaid by the Health Care 
Financing Administration [HCFA]. The purpose of the fee is to 
discourage overpayments and to offset the costs which HCFA incurs while 
recovering overpayments.
  In addition, this bill requires HCFA to screen claims for accuracy, 
paying particular attention to procedures and services which have high 
rates of overbillings and inaccurate billings.
  Under Medicare part A, hospitals and providers are prepaid annually 
by HCFA for expected Medicare expenditures. Currently, many hospitals 
grossly overestimate their Medicare funding needs and use the 
overpayment to subsidize services delivered at their facility which are 
not Medicare related. This is an abuse which must be stopped. This 
legislation will impose an administrative fee if a hospital 
overestimates its Medicare needs by more than 30 percent and does not 
repay the overpayment to HCFA within 30 days.
  Unlike hospitals, doctors must submit claims for payment to Medicare 
part B after they provide services to beneficiaries. However, these 
claims sometimes are submitted for services that were never provided or 
that are incorrectly coded. The fee which this bill would impose will 
discourage physicians from submitting false or misleading claims and 
will help HCFA cover the costs incurred while recovering overpayments 
to providers.
  Most importantly, prepayment screening will help eliminate 
overpayments in the first place. The technology for prescreening is 
available and already used extensively in the private sector. I believe 
that it is imperative that we start using prescreening

[[Page S1021]]

to improve Medicare payment accuracy.
  As my colleagues know, the Medicare system is in serious financial 
condition and will be bankrupt in 2001 if we do not make necessary 
reforms. We have an obligation to take every possible step to protect 
the Medicare trust funds and preserve them for current beneficiaries 
and future generations.
  I recognize that overpayments are not the only financial problem with 
Medicare, but they are a significant problem within the system. GAO 
reported that over $4.1 billion was overpaid from the trust funds in 
1995. Had this legislation been in place, I believe that we could have 
prevented a large portion of these overpayments if not prevented we 
could have at least imposed the administrative fee and recouped a 
significant amount.
  This bill is not the cure for what ails our Medicare system, but it 
is a step in the right direction. Overpayments are costly and 
contribute to the Medicare solvency problem. This legislation will help 
stop them.
  I ask unanimous consent a letter of support from the National 
Committee to Preserve Social Security and Medicare be included in the 
Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                    National Committee To Preserve


                                 Social Security and Medicare,

                                 Washington, DC; January 23, 1997.
     Hon. John McCain,
      U.S. Senate, Russell Senate Office Building,
     Washington, DC.
       Dear Senator McCain: The national Committee to Preserve 
     Social Security and Medicare, on behalf of our 5.5 million 
     members and supporters, endorses the ``Medicare Overpayment 
     Reduction Act.'' This important legislation will improve the 
     Medicare program by encouraging greater care in claim 
     submission and reducing the incentive to overbill the 
     Medicare program.
       The ``Medicare Overpayment Reduction Act'' addresses the 
     significant problem of waste and abuse in the Medicare 
     program by restoring to the Medicare program expenditures 
     that were the result of overpayments to providers. The bill 
     imposes a one percent administration fee on overpayments not 
     returned within 30 days by Medicare providers. By encouraging 
     a careful review of Medicare claims submissions by providers, 
     this legislation is an important step toward preserving the 
     Medicare program for current and future beneficiaries.
       Thank you, Senator McCain, for your outstanding work on 
     behalf of older Americans.
           Sincerely,
                                                Martha A. McSteen,
                                                        President.
                                 ______