Senators blast CMS for record payment errors

A Senate committee blasted the Centers for Medicare and Medicaid Services (CMS) Wednesday for failing to prevent record-high improper payments and for putting undue burden on falsely accused providers.

“The bottom line is, despite doing more audits than ever before, Medicare just isn't getting the job done when it comes to preventing payment errors,” said Sen. Bill Nelson (D-Fla.), chairman of the Senate Special Committee on Aging. “Medicare must change the way it pays its providers so that the cheats are getting caught and the honest providers are getting paid.”

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The committee released a bipartisan report Wednesday that says improper Medicare payments are at a record high and that the CMS hasn't done enough to fix the problem.

The report notes improper Medicare payments have climbed from 8.5 percent in 2012 to 10.1 percent in 2013, despite the fact the CMS has hired more recovery audit contractors (RACs) to track providers who may be overbilling for Medicare services.

"The increase in audits has not translated into a reduction in improper payments,” noted Sen. Susan Collins (R-Maine), ranking member on the committee. “In fact Medicare is currently experiencing its highest improper payment rate in five years."

The committee recommends the CMS's audits focus on providers who have made improper claims in the past, compensate auditors based on their ability to prevent improper payments, and improve its ability to track claims that have already been audited so there isn't any duplication.

Nelson and Collins said the RACs were putting undue burden on many providers who are eventually found to be innocent of fraud through the ringer and hurting their business.

“The incentive is out of whack,” said Nelson. “If the goal is you want to reduce the overall amount of improper payments that's what also ought to be what we're going after and compensate the contractors based on that instead of on the number of improper payments that they identify.”

Recently House lawmakers echoed Wednesday's Senate committee criticism. During a House subcommittee panel hearing lawmakers said RACs are more geared toward trying to get paid for every minor mistake rather than trying to prevent improper payments to Medicare.