Medicare Fraud, Errors Cost $20 Billion in ‘97, Study Says

Medicare lost about $20 billion last year to fraud, waste and simple error, says a government audit being released today at a congressional hearing.

The estimated 11 cents squandered on every dollar spent in 1997 by the health care program for the elderly is down from 14 cents in 1996.

“We think that our unprecedented war against fraud and other corrective actions against improper payments are having an impact,” said Medicare spokesman Chris Peacock.

Lawmakers said Medicare’s losses remain far too high. “The taxpayers are footing the bills,” said Sen. Charles E. Grassley (R-Iowa), who chairs the Senate’s Special Committee on Aging.

The audit of Medicare’s 1997 spending was done by the Health and Human Services Department’s inspector general, who reviewed a representative sample of bills.

Of the $177.4 billion that Medicare paid to doctors, hospitals, laboratories and other health care providers in 1997, auditors estimate that $20.3 billion was wasted.

That compares with $23.2 billion in overpayments reported for 1996. But since the auditor’s conclusions are statistical estimates, improper payments for 1997 might have been as high as $28.4 billion or as low as $12.1 billion, the report says.

Doctors received 29% of improper payments. Hospital inpatient and outpatient services accounted for about 30% and home health-care agencies got 13%.