New Report Uncovers Medicare Waste
Perhaps no government program has become more synonymous with waste, fraud and abuse than Medicare. So when the Associated Press broke a story last week noting that the Medicare program “paid more than $120 million from 2009 to 2011 in violation of federal law for medical services for inmates and illegal immigrants,” many in Washington likely didn’t bat an eye. But policymakers in Washington and taxpayers throughout the nation should be appalled by this latest example of careless, unnecessary Medicare spending. Just because there are so many examples of mismanagement of Medicare funds does not mean that this should desensitize folks from the magnitude of the problem.
Improper payments are not a new problem. On February 7, 2012, the Government Accountability Office (GAO) released a report, “Improper Payments: Moving Forward with Governmentwide Reduction Strategies,” which identifies $115 billion in improper payments by the federal government. According to the report, “The $115.3 billion estimate was attributable to 79 programs spread among 17 agencies. Ten programs accounted for about $107 billion or 93 percent of the total estimated improper payments agencies reported for fiscal year 2011…The federal government continues to face challenges in determining the full extent of improper payments…Internal control weaknesses continue to exist, heightening the risk of improper payments.” The GAO lists the most vulnerable programs and, to nobody’s surprise, Medicare and Medicaid are at the top of the list with $29 billion and $22 billion respectively in improper payments.
Last week’s reports from the Department of Health and Human Services inspector general provides another dose of harsh reality when it comes to how your tax dollars are being spent. The AP article explains the breakdown of the spending, “the program was billed for more than $33 million in inmate care and more than $91 million for illegal immigrant care over that period…” If these numbers alone aren’t bad enough, remember that these funds are distributed despite the fact that “Under federal law, Medicare generally does not pay for services for either group [inmates or illegal aliens] of patients.” Not only is this practice wasteful spending, it is also illegal. Not to mention, this is despite the fact that these “recipients” are not even eligible to be part of the program.
The news article goes on to point out that Medicare’s expenditures in 2011 were $549 billion, making the latest “figures a fraction of the program's annual budget.” Is that supposed to console us? Worse still, the total amount of Medicare fraud is estimated to be around $60 billion per year. That means that fraud alone tallies up to roughly 11 percent of Medicare’s entire budget! The next time a politician bemoans the difficult cuts that must be made because Washington’s out-of-control spending has finally caught up to it, remember this $60 billion figure and tell him that’s a great place to start.
It is unacceptable to allow this practice of improper payments to continue as business as usual in Washington. It is one thing that these improper payments occurred in the first place, it’s another issue that once the payments were made the “agency didn't instruct its contractors to try to recoup the lost funds.” Fortunately, the HHS IG report recommends that “federal health officials establish a better system to automatically flag charges for inmates and illegal immigrants to stop illegal payments before they are made.” This seems like a no brainer, and the Centers for Medicare and Medicaid Services shouldn’t have to wait around for an HHS report to realize and begin to implement it.
As our nation gears up for another contentious debate over immigration policy, here’s to hoping that Washington doesn’t forget to rectify the component of improper Medicare payments within the broader discussion. There are a lot of policy talks floating around that will take a small miracle to solve. Fortunately, addressing and eliminating Medicare waste, fraud and abuse isn’t one of them. It’s about time Washington shows taxpayers it is capable to be responsible stewards of our money.