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DC Tops Medicare List for Wasteful Healthcare Spending

It was found that the District of Columbia had the largest amount of waste per consumer throughout the country with nearly $178 wasted per individual.

By Vera Gruessner

- When it comes to medical care reimbursement, one of the most pivotal issues is eliminating wasteful healthcare spending. The Council for Medicare Integrity released a report detailing wasteful healthcare spending throughout the Medicare fee-for-service program.

Wasteful Medicare Spending

In particular, the analysis measures how much money was wasted per beneficiary. It was found that the District of Columbia had the largest amount of waste per consumer throughout the country with nearly $178 wasted per individual.

This type of finding is important to address, as Washington D.C. actually includes the smallest number of Medicare beneficiaries throughout all 50 states, according to records from the Centers for Medicare & Medicaid Services (CMS).

“Medicare loses more money to waste than any other Federal program. According to FY2014 Comprehensive Error Rate Testing (CERT) conducted by CMS, the Medicare FFS program has a 12.7 percent billing error rate,” the report stated.

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  • “This error rate equates to the program losing $46 billion annually due to provider misbilling. Unfortunately, the Medicare error rate continues to trend upward, having risen 1 significantly each of the past two years.”

    The analysis also offered nine other states that were found to have some of the highest levels of wasteful healthcare spending. The list includes Arkansas, Mississippi, North Dakota, Louisiana, Oklahoma, Colorado, Texas, New Mexico, and South Dakota.

    The Council for Medicare Integrity discovered that South Dakota – in 10th place – wasted less than half of the medical spending as the District of Columbia, which took first place. Vermont was the state with the smallest amount of wasteful healthcare spending per beneficiary with only $7.58 being billed inaccurately per consumer.

    North Dakota and South Dakota rank at the top as well when it comes to wasteful healthcare spending while at the same time having some of the smallest numbers of Medicare beneficiaries throughout the nation.

    “Medicare loses more money to waste than any other government program – $46 billion in FY2014 alone – and the billing error rate continues to be on the rise. This incredible loss of taxpayer dollars is one of the top reasons Medicare Trustees now say the program will be bankrupt within the next 15 years. Medicare auditing is more necessary than ever to ensure the program will be in place when we need it in the future. It’s time to stand up and ensure your Member of Congress supports the RAC program’s work to prevent the waste of your taxpayer dollars,” Kristin Walter, spokesperson for the Council for Medicare Integrity, said in a public statement.

    The analysis from the Council for Medicare Integrity also detailed rates of returned underpayments and the states with the smallest amount of wasteful healthcare spending within the Medicare fee-for-service program.

    The states with the least Medicare wasteful spending include New Hampshire, Wisconsin, Maine, Minnesota, Idaho, Massachusetts, Maryland, Oregon, and Rhode Island. Those with the least underpayments in the Medicare fee-for-service program include Maryland, Delaware, New York, Connecticut, Iowa, Montana, Pennsylvania, New Jersey, Wyoming, and Nebraska.

    The reason this analysis is so important is due to the breakdown of one potentially vital program within the federal government. The Recovery Audit Contractor program, which used to overlook and review Medicare billing as well as recover funds that were incorrectly paid out through CMS, has been scaled back since the beginning of 2014 due to pushbacks from hospitals.

    As such, it is important for the federal government to keep an eye on the states that have high levels of wasteful healthcare spending and reign in any problems before they escalate. The Council for Medicare Integrity analysis report will be a key step forward in addressing these concerns.

    “Each state must do their part to curb Medicare misbilling,” Walter continued. “If all entities involved made eradicating waste a priority, we would not have to worry about losing Medicare altogether in 2030.”


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