I’ve been feeling a bit remiss (but only a bit) about my light posting of late — but hey, it’s summertime, and if Vanderleun can take a vacation, well, why not me?
But of course there’s always something which comes up, which demands some comment — such as this little blurb in the Wall Street Journal today:
Medicare Auditors Recover $700 Million in Overpayments
Auditors have recovered nearly $700 million in Medicare overpayments to hospitals and other medical providers in a half-dozen states under a controversial program that pays the auditing firms a portion of amounts they identify.
The program has drawn fire from health-care providers, and hospitals in particular, who call it overly aggressive and too confrontational. But the federal Centers for Medicare and Medicaid Services has supported the move and is in the process of expanding it nationally.
In all, the agency’s recovery audit contractor program caught $1.03 billion of improper payments over about three years, primarily in New York, California and Florida, about $992.7 million of which was overpayments by Medicare. The audits also identified about $38 million that providers should have received but didn’t. (Three states were added toward the end of the trial program, but accounted for only a small part of the recoveries, Medicare officials said.)
The program’s expenses amounted to about 20 cents on the dollar, including $187.2 million paid to the audit firms, and medical providers successfully challenged about $60 million of overpayments identified by the auditors. In the end, about $694 million has been returned to the Medicare trust funds, the Medicare agency said. The auditors reviewed a total of $317 billion in claims.
“All in all, we’re very happy with the results,” said Tim Hill, the agency’s chief financial officer and director of its office of financial management. “It returned a lot of money to the trust fund, particularly when you think that we’re talking about three states.”
I’ll bet you’re very happy, Mr. Hill.
Now, at first glance, this would appear to one of Medicare’s already notorious fraud and abuse investigations, carried out by OIG, but no — there’s no accusation of fraud involved here, although the government is more than happy to let this implication stand.
What this involves is demanding refunds based on different interpretations of Medicare’s mind-boggling regulations. So you provide a health care service, and bill Medicare based on your best understanding of its Byzantine regulations, and get paid. Then, at some future date, a third-party auditor, hired by the Feds, reviews the claim and decides — with no input from clinicians or other health care experts — that you were paid in error. Out goes the notice, pay up or else. Of course, this is always a highly objective, impartial review — the fact that the auditor gets a hefty cut of the refund has absolutely no influence on their judgment, none whatsoever.
Of course, you have a right to appeal — on your own dime and time, hiring your lawyers and taking time off from your practice to prove to the bounty hunter that your interpretation of the regulations is the correct one, and his is wrong. If you win, you get to keep the cash you already earned — minus a small stipend for lost time and lawyers fees. So, on that disputed $35 you got for an office call, you might come out, oh, $20,000 short, give or take a few thousand. But hey: You won!! Ain’t it grand?
Of course the low rate of appeals, entirely predictable based on the above freakonomics, is seen as proof that the audits are finding real problems:
Mr. Hill pointed to the low appeal rate — about 14% of overcharges were appealed, and 4.6% of the total were overturned — as evidence that the audits succeeded. “We know that we got the right answer,” he said.
If an 800-pound gorilla wants to make love to you, it’s always best to fake an orgasm. And the luvin’ ain’t over ’till the gorilla says it’s over…
Of course, these auditors also expend large amounts of time and energy looking for cases where you were underpaid:
RACs [Recovery Audit Contracts] are authorized to review payments for the previous 4 years. The software they use is more capable of picking up overpayments than it is underpayments. This discrepancy is borne out by a CMS report showing that 97% of improper payments in fiscal year 2006 were overpayments, and only 3% were underpayments. No money has been reported as having been returned to physicians because of underpayment.
At this point, the program has been primarily focused on hospitals in a few states, but is being rolled out nationwide, and will quickly be auditing physicians and other health care providers.
I have spoken a considerable length about the maze which is our current reimbursement system. It makes perfect sense, in a way, for the Feds to do exactly this: use bounty hunters to exploit the system’s complexity and inscrutability. They will no doubt recover a bundle of money, keeping the band playing on the Titanic for a few more years.
But sooner or later there’ll be a price to be paid — and that price is access. Repeated pay cuts such as the currently stalled 10.4% Medicare fee reduction being bantered around Congress, combined with heavy-handed recovery audits such as these, will drive physicians to the exits in droves. It is already nearly impossible in our area to find a primary care physician who accepts Medicare patients; a few more years of this B.S. and you’ll likely get a pretty clean sweep: best of luck finding anyone who will see you if you have Medicare or any other Federal health insurance.
Happy hunting on your audits, Mr. Hill.