The Catch 22 In Efforts to Cut Medicare Spending

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Some of our Congressional leaders are vehement about it.  Some disagree.  Everyone seems to get that we need to fix our debt problem by reducing government spending on something. But what?

For those who are extremists about cutting government spending on Medicare, consider this: we taxpayers are getting ripped off by the Medicare program.  To me, the solution is not in cutting how much we pay doctors and other providers of healthcare.  It’s about enforcing the protections that exist to stop fraud.  

We can’t protect ourselves against fraud without spending money to do it.  It’s rather like law enforcement.  You don’t reduce crime rates by cutting out police officer jobs.  With state budget cuts, we tried that, remember?  Don’t know about you, but crime rates rose right away when that took place in my area.

Consider the Office of the Inspector General’s report, issued this month, revealing that skilled nursing facilities (SNFs) committed widespread fraud, or errors, to the tune of $1.5 billion worth of inappropriate Medicare payments in 2009. That doesn’t even count how much Medicaid fraud is also included in those same claims, but it’s likely that Medicaid picked up part of the tab for a significant proportion of them.

The OIG’s report made six specific recommendations to the Centers for Medicare and Medicaid Services (CMS), the entity which is responsible for overseeing these programs.  CMS agreed with all of the recommendations.  OK, here’s the rub.

If CMS is going to expand review of SNF claims, how will it do that without more inspectors and improving how it does inspections?  Knowledgeable and trained inspectors go through millions of claims, comparing the data against past history, averages, and other digital information that will alert them to unusual activity in billing.  Clearly that takes person power.  That means contractors at work.

Every single recommendation the OIG made will likely require more contractors to do more, not just more efficiency in the existing workers, to effectively carry out.  If we had enough inspectors to adequately monitor the claims billing activity in nursing homes, I seriously doubt that we would have a $1.5 billion problem there.  The overall amount Medicare paid out in SNF services in 2012 was $32.2 billion.  That needs a lot of monitoring.  We can’t fix fraud by cutting benefits to the elder and disabled people who need them.

CMS uses  Medicare Administrative Contractors, and Recovery Audit Contractors among others, to safeguard the program’s billing.  Who thinks we need to cut out those contractors to reduce fraud?

We also need to prosecute the fraudulent billers in these facilities. In 2012, CMS reduced payments to SNFs by approximately $3.9 billion.   As skilled nursing facility reimbursements have decreased from either Medicaid or Medicare, they’ve found a handy way to make up for the diminished revenue:  bill for things that don’t actually happen.  Add billing for some therapy visits that didn’t take place.  Make the therapy continue with the older person, even if it isn’t doing a bit of good anymore, just to get the revenue.

OIG study found that the standardized method SNFs use to rate the resident’s condition and how serious is the need for care was misreported for 47% of all claims.  The more seriously the SNF rates the resident, the more money it gets each day. We can’t make these analyses and ferret out the misreporting without investing in the process.

These are complicated analyses.  It takes a degree of skill to derive useful data from millions of Medicare claims. No one can put this on autopilot and get the information we need to stop the ripoff.  We need to beef up and increase efficiency in the way we inspect billing, audit SNFs and prosecute violators.  Some of them will still get away with fraud, there is no doubt, but we can at least aim for a major reduction in the amount of it.

The way I see it, we need to put financial resources into addressing Medicare fraud.  Investing in whatever we need, whether it is efficiency experts, better computer monitoring programs or devising programs to increase the effectiveness of existing inspection methods, we need to do it.  If it saves us any part of the billion and half dollars we wasted in 2009 it will surely be worth it.  When it comes to cutting government spending on healthcare, we don’t want to be penny wise and pound foolish.

And for those so eager and insistent on slashing benefits to the frail elders on both Medicare and Medicaid who desperately need the help, I challenge you to tell us what the alternative is for someone 90 years old with complex medical issues who lives on Social Security.  How are they to get care? Some have no family. Some have a spouse as old as they are and almost as frail.  Some have incompetent family who would neglect them.  There is nothing we have to care for these people other than public benefits.  I have personally taken care of some of them myself in my nursing days.  Gets me rabid on the subject, I’m afraid. Do tell us what other options besides Medicare and Medicaid they have to receive basic and decent care. What, exactly is the plan for cutting these benefits to the elderly and disabled poor?  “Job creators,” I await your answer.

Until next time,

Carolyn Rosenblatt,

AgingParents.com

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