Hospital Lobby Blocking Efforts To Curb Medicare Fraud

02.13.2015 | News | Cloakroom Confidential |

Republicans have taken over the Congress and now comes the hard work of cutting waste, fraud and abuse. Conservatives hope that the promises of change were not all hot air.

There is no debate on the waste, fraud and abuse in government health care that is rampant and yet the expansion of Obamacare has created more opportunities to pilfer the American taxpayer. In fact, efforts to rid Medicare of waste, fraud and abuse have been stymied by the power of the hospital lobby that refuses to payback excessive payments made by Medicare and are working with friends and allies in government to ensure the improper payments are never returned to the taxpayers.

It’s not like the abuse of the taxpayers isn’t easily identifiable. The Department of Health and Human Services (HHS) believes that at least $46 billion dollars was improperly paid out, much of it to hospitals. Just last week, HHS’ Inspector General reported that 47% of funding for Medicare wheelchairs and power scooters were improperly awarded. One would think that it would be a priority for Congress and the Executive Branch to eliminate fraudulent payments, but apparently that is not the case as evidenced by recent efforts to kill a critical program that was specifically designed to reduce hospital overbilling.

The Recovery Audit Contractor (RAC) program was created in 2010 to specifically identify and then collect excessive payments in the Medicare program. The program is designed to incentivize auditors to find waste, allowing the companies to collect up to 12.5% of monies collected. Within two years, the program recovered a whopping $2.3 billion dollars for the taxpayers.

With much of the money already in the coffers of hospitals, their lobbyists began an aggressive campaign to kill the RACs program. Perhaps as a gesture of goodwill for their efforts on behalf of Obamacare, the White House began to slowly smother the program, a huge victory for the American Hospital Association that has peppered Congress and the White House with a pressure campaign to ensure the overpayments are never returned to the Treasury.

The results of the lobbying effort have been devastating. With the program sidelined and limited, the improper payment rate in the Medicare dee-for-service program rose $10 billion to $46 billion in 2014.

Fiscal conservatives in Congress has been eerily silent on the matter. In fact, at least one GOP members, Rep. Sam Graves (R-MO) has actually introduced legislation further limiting the ability of the auditors to sniff out waste. His bill would block audits of Medicare providers unless their estimated error rate exceeded 40% of total billing. More than one third of all Medicare bills would have fraudulent before an audit could be triggered. So much for good government. Worse yet, the “Cromnibus” contained a provision suspending all audits for another 6 months.

Citizens Against Government Waste has demanded the program be restored but it seems like K Street lobbyists have effectively put the interests of the hospitals ahead of the interests of the American people.

Republicans need to step up to the plate and cut waste, fraud and abuse, or they endanger their prospects of 2016 being a good year from the top of the ticket to the bottom.