Medicare under a watchful eye

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Health Care Financing Administration

Medicare under a watchful eye

Posted 3-6-2000
By Chris Schreiber

Washington. The Health Care Financing Administration (HCFA) hopes a new project will cut back on waste and fraud for more than 50 private insurance companies that process Medicare claims each year.

HCFA plans to do this by extending its national error-rate measurement on Medicare claims to include error-rate data for the insurance companies.

HCFA officials expect to use the error-rate numbers generated by annual audits to promote improvements and greater accuracy for the nearly 1 billion Medicare claims filed each year.

According to HCFA, which administers Medicare, the Office of the Inspector General began annual audits of the entire Medicare program in 1996. It is hoped that the new error-rate project, which will begin this summer, will reduce error rates from year to year.

The first division to undergo this scrutiny will be Medicare’s four regional carriers for durable medical equipment. Durable medical equipment providers were recently embroiled in one of the most high-profile insurance scams ever. Law enforcement officials in California uncovered a series of organized criminal groups that were defrauding the MediCal system by filing false equipment claims that may have cost more than $1 billion.

Contractors have largely supported attempts to crack down on fraud and abuse, said Richard Coorsh, spokesman for the Health Insurance Association of America. But Coorsh said it is too early to tell how this will affect the industry’s involvement with Medicare.

The Coalition Against Insurance Fraud estimates that there was nearly $54 billion in fraudulent claims in 1997 against governmental and private health insurers. About $34 billion was attributed to fraudulent claims against Medicare and Medicaid.