Sen. Carper Highlights Report Detailing Medicare Waste and Fraud Vulnerabilities

Inspector General Says Most of $1.2 Billion in Vulnerabilities Unaddressed

WASHINGTON – Today, Sen. Tom Carper (D-Del.) highlighted a report released today by the Department of Health and Human Services (HHS) Office of the Inspector General (OIG) that describes over $1 billion in Medicare overpayments as a result of ongoing vulnerabilities in the program. The report found that although Medicare contractors hired to perform oversight, called Zone Program Integrity Contractors (ZPIC), identified in 2009 at least $1.2 billion in ongoing coding and billing problems that lead to improper payments, the Centers for Medicare and Medicaid Services (CMS) had not adequately addressed these vulnerabilities to prevent improper payments.

The report found that as of January 2011, CMS had not resolved or taken action on 77 percent of the improper payment problems identified by the ZPICs in 2009. Most of the vulnerabilities were improper coding or billing in nature. The reports found that the errors added up to $1.2 billion in overpayments; however only one-third of the vulnerabilities had monetary impact reported by the contractors. Because monetary impact of the vulnerabilities was reported inconsistently or not at all, the actual monetary impact of the vulnerabilities reported in 2009 could be significantly greater than $1.2 billion.

“We have made important strides in recent years in our efforts to curb the billions of dollars in fraudulent and improper Medicare payments, but there’s still more we can do,” said Sen. Carper. “This Inspector General report shows that Medicare officials have in front of them a specific roadmap to fix vulnerabilities that have wasted more than a billion dollars. Medicare officials must quickly step up their efforts to follow this road map in order to close loopholes and address vulnerabilities that allow overbilling and fraud. As Congress and the Administration continue to work to find common ground on a deficit reduction plan, we must redouble our efforts to curb the billions in Medicare improper payments that are lost every year. I am eager to see the Centers for Medicare and Medicaid Services lay out specific deadlines for taking action on the Inspector General’s recommendations and plan to follow up with them to make certain that they do.”

The HHS OIG recommends that CMS take action to resolve all of the identified Medicare vulnerabilities that have yet to be addressed, establish formal written plans for addressing future identified vulnerabilities, establish a timeline for follow-up, and clearly outline responsibilities for both CMS and the contractors. The HHS OIG also recommends requiring all contractors to report the monetary impact of the vulnerabilities, where possible.

To view the full report, please visit