The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants

By Carol Miller RN MBA

The Cost of Health Fraud

There is no question that real fraud, waste and abuse exists in healthcare today. The Office of Inspector General of the Department of Health and Human Services (HHS) saved American taxpayers a record $21 billion a dozen years ago, according to Inspector General Janet Rehnquist. Savings were achieved through an intensive and continuing crackdown on waste, fraud and abuse in Medicare and over 300 other HHS programs for which the Office of Inspector General (OIG) has oversight responsibility.

More recently, according to the Centers for Medicare and Medicaid Services [CMS] and under the tenure of Eric Himpton Holder, Jr., 82nd Attorney General of the United States and more recently Loretta Lynch, Recovery Asset Contractors [RACs] collected almost $1-B in improper payments during their beta testing period in 2009-10.

Of these payments; 96% were over-payments, 4% were under-payments; and 77% of providers failed to appeal, 7% appealed successfully and 15% appealed unsuccessfully.

And, by Fiscal Year 2016, recovery auditors collectively identified and corrected more than 1,532,249 claims for improper payments, which resulted in more than $3.75 billion dollars in improper payments being corrected. The total corrections identified include more than $3.65 billion in overpayments collected and $102.4 million in underpayments repaid to providers and suppliers.

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After taking into consideration all fees, costs, and first level appeals, the Medicare FFS Recovery Audit Program returned over $3.0 billion to the Medicare Trust Funds.

More Costs

These savings did not take into account program costs and administrative expenses incurred at the third and fourth levels of appeal (Office of Medicare Hearings and Appeals (OMHA) and Medicare Appeals Council within the Departmental Appeals Board (DAB), respectively), as these components do not receive Recovery Audit Program funding for those appeals.

Conclusion

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• FINANCE: Financial Planning for Physicians and Advisors
• INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
• Dictionary of Health Economics and Finance
• Dictionary of Health Information Technology and Security
• Dictionary of Health Insurance and Managed Care

 Harvard Medical School

Boston Children’s Hospital – Psychiatrist

Yale University

Filed under: Ethics, Risk Management | Tagged: Carol Miller RN MBA, health fraud, Medicare FFS Recovery Audit Program, Office of Medicare Hearings and Appeals, RACs, Recovery Asset Contractors, Recovery Audit Program | 2 Comments »