Testimony of Daniel R. Levinson, Inspector General on March 9, 2011

before the House of Representatives, Committee on Oversight and Government Reform, Subcommittee on Government Organization, Efficiency and Financial Management on Improper Medicare Payments

Excerpts from the testimony:

OIG Reviews Identify Improper Payments and Recommend Corrective Actions

OIG conducts targeted reviews to determine the scope of improper payments for specific service types and recommends actions to improve program safeguards. By reviewing medical records and other documentation associated with a claim, we identify services that are undocumented, medically unnecessary, or incorrectly coded, as well as duplicate payments and payments for services that were not provided. In doing so, we uncover systemic payment vulnerabilities and make recommendations to address them.

Medically unnecessary services are particularly concerning as beneficiaries may be subjected to tests and treatments that serve no purpose and may even cause harm. Further, because beneficiaries are generally responsible for a 20-percent copayment for items and services provided under Medicare Part B, beneficiaries may pay unnecessary or inflated copayments when they receive items or services that they do not need, or more expensive versions than they need. For beneficiaries who are eligible for Medicare and Medicaid, their Medicaid programs may bear the costs of these copayments.
For example, we reviewed claims for certain types of support surfaces used to prevent and treat bedsores and found that more than 1 in 5 claims were medically unnecessary. In a review of power wheelchairs, we determined that 9 percent of claims were not medically necessary and the records for an additional 52 percent of claims did not contain sufficient documentation to determine whether they were medically necessary. Improper payments for these wheelchair claims totaled $95 million over a 6-month period. To address these and other types of errors, we recommended that CMS take a variety of actions to ensure that claims are paid appropriately, including conducting additional prepayment and post-payment medical reviews.

For some services, we have found pervasive documentation errors. For example, we found that 60 percent of Medicare claims for rehabilitation power wheelchairs did not meet all documentation requirements. These claims accounted for $112 million in improper Medicare payments over a 6-month period. We have also found significant rates of documentation error for certain types of pain management services. We recommended that CMS take actions to address these errors, including improving controls, educating providers, and clarifying guidance.

In some cases, documentation or coding errors may signal broader vulnerabilities affecting patient care. For example, we found that 82 percent of hospice claims for beneficiaries in nursing facilities did not meet all Medicare coverage requirements – requirements that are in place to protect beneficiaries’ health and wellbeing. Problems included failing to establish plans of care and providing fewer services than outlined in beneficiaries’ plans of care, potentially putting the beneficiary at greater risk. To prevent these problems from recurring and to better protect hospice patients, we recommended that CMS educate hospice providers about coverage requirements, provide tools to hospice providers (e.g., guidance, templates, and checklists), and use targeted medical reviews and other oversight to improve compliance.

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