Medicare’s billing error rate irks Grassley

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Sunday, November 16, 2003

November 17, 2003

WASHINGTON - Medicare’s error rate for fiscal year 2003 was estimated at 5.8%, or $11.6 billion, down from 6.3% last year, CMS reported last week.

Despite that decrease, Sen. Charles Grassley, R-Iowa, attacked the report, complaining that it was “not statistically valid.”

Grassley said the agency adjusted the results of its annual review to avoid showing a spike in improper payments in Medicare. "It appears that the 'unadjusted' error rate of close to 10% was too high for CMS - almost 4 percentage points higher than the previous two years," Grassley wrote to Dara Corrigan, acting inspector general for the Department of Health and Human Services, which includes CMS.

Leslie Norwalk, the acting CMS deputy administrator, acknowledged the error rate initially showed $20 billion in improper payments. But she said there were 6,000 claims for which health-care providers submitted no information and CMS officials decided, based on prior years, not to count them as improper payments, the Associated Press reported.

"The annual error rate gives us an estimate of how much billing mistakes cost the American taxpayer, and that number is always too high," said CMS Administrator Tom Scully. "The information we now have available will help us to better understand the problem, better manage the program, and better educate providers and contractors to prevent errors in payment. It also underscores the need for us to modernize Medicare by allowing us to make the contractors more accountable to CMS and the taxpayers."

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