Updated IT could stem Medicare fraud, abuse

A top investigator at the Health Care Financing Administration today told a House subcommittee that the Medicare program remains vulnerable to fraud, waste and payments of unnecessary benefit payments.

June Gibbs Brown, inspector general for the Department of Health and Human Services, told the House Government Management, Information and Technology Subcommittee that HCFA made improper Medicare payments in fiscal 1998 totaling $12.6 billion, or 7 percent of Medicare payments.

"The improper payments could range from inadvertent mistakes to outright fraud and abuse,'' Brown told the subcommittee, which is holding a series of hearings to examine the results of financial statement audits of federal agencies. "We cannot quantify what portion of the error rate is attributable to fraud."

Brown said HCFA's major errors stem from insufficient documentation, incorrect coding and lack of medical necessity, which is the highest error category this year, representing $7 billion of the total improper payments.

Brown recommended, among other things, that HCFA should update computer systems and related software technology to better detect improper Medicare payments.

Mike Hash, HCFA's deputy administrator, said HCFA has begun evaluating fraud-detection technology for use by Medicare contractors.

Hash said the documentation error rate for the Medicare program dropped from 7 percent to 14 percent in just two years, but he added that the rate is still too high. Hash said the Health Insurance Portability and Accountability Act and the Balanced Budget Act have provided "essential tools'' to protect the Medicare program from fraud. "We have made considerable progress by increasing investigation, indictments, conviction, fines, penalties and restitutions," Hash said.