[Congressional Record Volume 147, Number 29 (Wednesday, March 7, 2001)]
[Extensions of Remarks]
[Page E295]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   DROP IN MEDICARE IMPROPER PAYMENTS

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                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                        Wednesday, March 7, 2001

  Mr. STARK. Mr. Speaker, yesterday the Department of Health and Human 
Services (HHS) reported that improper Medicare payments to doctors, 
hospitals and other health care providers declined in fiscal year (FY) 
2000 to an estimated level of 6.8 percent. This level compares with an 
error rate of approximately 8 percent in FY 1999. The error rate has 
fallen by roughly half since it was first estimated at approximately 14 
percent in FY 1996.
  The FY 2000 payment error rate represents improper payments of $11.9 
billion out of total payments of $173.6 billion in the traditional fee-
for-service Medicare program. This improper payment amount compares 
with improper payments of $13.5 billion in FY 1999 and $23.2 billion in 
FY 1996.
  The Health Care Financing Administration (HCFA) met its target for 
reducing the Medicare error rate to 7 percent in FY 2000 and continues 
to take steps to meet its FY 2002 goal of 5 percent.
  Mr. Speaker, this continued decline in the Medicare error rate 
demonstrates the success of all the actions that HCFA has taken to 
reduce billing errors in Medicare over the past five years. According 
to the Inspector General, the significant, sustained improvement 
reflects HCFA's improved oversight, its efforts to clarify Medicare 
payment policies, and its insistence that doctors and health care 
providers fully document the services that they provide. Other factors 
have been new initiatives and resources to prevent, detect and 
eliminate errors and fraud in Medicare.
  Mr. Speaker, many criticized HCFA when the payment error rate was 14 
percent and demanded that HCFA reduce it.
  Now many criticize HCFA for the actions it has taken to reduce 
payment errors and for insisting that providers file claims accurately. 
I say that we should praise HCFA for its efforts to reduce Medicare 
payment errors, and we should ensure that HCFA does not diminish its 
efforts to reduce those errors still further. We should not be 
satisfied with payment errors in Medicare.
  To achieve further reductions in Medicare payment errors, we must 
reduce the complexity of Medicare payment rules and improve provider 
education and information, but we must continue to insist on accuracy 
in claims filing. We must increase the resources available to HCFA to 
help providers file their claims properly and to monitor claims to 
ensure correctness. We must also provide the resources to upgrade 
HCFA's claims processing systems and other information technology 
systems, without which we cannot hope to continue to reduce errors in 
Medicare payments.
  It is important to understand that the error rate does not measure 
the level of fraud in Medicare, although some errors could be the 
result of fraud. Instead, the error rate measures the percentage of 
payments made by Medicare that were not supported by documentation by 
providers or that otherwise did not meet Medicare payment requirements.
  According to the Inspector General, virtually all of the claims 
examined in the audit were paid correctly by Medicare based on the 
information that providers submitted in the claims. The error rate was 
calculated by examining a statistically valid sample of Medicare 
claims, and auditors reviewed the medical records supporting the claims 
with the assistance of medical experts. The sample findings were then 
projected over the universe of Medicare fee-for-service benefit 
payments.




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