Manipulating Medicare

Published — July 29, 2011 Updated — May 19, 2014 at 12:19 pm ET

Medicare paid $47.9 billion for unneeded, miscoded or undocumented health care

Pat Little/The Associated Press

Watchdog plans to audit “error-prone” providers


Medicare spent $47.9 billion in one year for health care treatments and equipment that were not medically necessary, miscoded by providers, or lacked proper documentation.

Only a small amount of the $47.9 billion in improper payments reported in 2010 was due to fraud, according to Daniel Levinson, inspector general for the Health and Human Services Department.

Some 94 percent of the improper payments were made to durable medical equipment suppliers, hospitals, skilled nursing facilities, home health agencies and physicians, Levinson told a U.S. House Oversight and Government Reform subcommittee on Thursday.

For example, 57 percent of claims for wheelchairs were either not medically necessary or did not have the required documentation, he said. As a result, Medicare paid $95 million over a six-month period for wheelchairs that the government insurance plan should not have paid.

Additionally, 60 percent of claims submitted to Medicare for power wheelchairs were not documented properly, resulting in $112 million in improper payments over six months, he said.

The inspector general said his office plans to examine a group of what he described as “error-prone” providers who have submitted a number of incorrect claims in the past four years. The internal watchdog is also taking a closer look at bills submitted by power wheelchair providers, nursing homes, home health care agencies and hospitals to prevent incorrect payments, he said.

While fraud accounts for a relatively small amount of improper payments, Levinson said his office has opened more than 1,700 fraud investigations this fiscal year, and collected $3.8 billion in fines, penalties, restitution and settlements in fiscal 2010.

“Although not all improper payments are fraudulent, all payments resulting from fraud are improper,” Levinson said. “There is no precise measure of the magnitude of health care fraud, but we know that it is a serious problem that demands an aggressive response.”

FAST FACT: Medicare paid $3.6 million for prescription drugs on behalf of dead patients, according to 2010 data, the inspector general said.

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