IT Tools Helped Curb Improper Medicare, Medicaid Payments

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On Tuesday, the Obama administration announced that its efforts to reduce improper payments by federal programs, including Medicare and Medicaid, have saved $17.6 billion in the last year and that IT tools played a role in achieving the savings, Healthcare IT News reports (Manos, Healthcare IT News, 11/15).

About the Initiative

The "Campaign To Cut Waste" initiative is part of an executive order President Obama issued to prevent improper payments by Medicare, Medicaid, Pell Grants and food stamp programs.

Obama administration officials said the initiative is on pace to reach its goal of preventing $50 billion in payment errors by the end of 2012 (Pecquet, "Healthwatch," The Hill, 11/15).

Data indicate that waste-reduction measures have resulted in Medicare's payment error rates falling from 10.2% in 2010 to 8.6% in 2011.

In addition, Medicare's fee-for-service error rate declined from 9.1% in 2010 to 8.6%, while Medicare Part D's 2011 error rate of 3.2% was well below the government average.

Further, Medicaid's payment error rate declined from 9.4% in 2010 to 8.1% in 2011, which resulted in the program avoiding about $4 billion in improper payments (Daly, Modern Healthcare, 11/15).

Jack Lew, director of the Office of Management and Budget, said the reduction in improper payments is tied to the effective use of technology (Healthcare IT News, 11/15).

For example, federal officials have established the paymentaccuracy.gov website to focus more attention on the issue of improper payments (Weigelt, Federal Computer Week, 11/15).

IT-Related Pilot Program

HHS plans to launch several pilot programs to further reduce Medicaid and Medicare payment error rates.

One of the pilots will test an automated tool to screen health care providers for fraud risk through state partnerships, called the Partnership Fund for Program Integrity Innovation. The tool could help focus resources where fraud is most likely to happen (Healthcare IT News, 11/15).

The other pilot programs will:

  • Expand use of recovery audit contractors to screen certain hospital payments before they are made to catch wasteful spending;
  • Allow hospitals to resubmit bills to Medicaid for certain services when they make an error; and
  • Permit HHS to review certain medical equipment claims before they are made ("Healthwatch," The Hill, 11/15).
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