Medicare Spending Fell Last Year for First Time

Medicare spending dropped slightly in fiscal year 1999, the first decline ever in the federal program that pays health care bills for 39 million Americans, government figures show.

New statistics from the Treasury Department show that Medicare expenditures fell 1% to $212 billion in the fiscal year ending Sept. 30, from $213.6 billion in the previous year.

Experts attributed the drop to cuts mandated by Congress, more careful billing practices by health care providers and a crackdown on fraud. But they said Medicare spending is unlikely to continue falling because the elderly population is growing.

“No one should expect a continuation of an actual drop in Medicare expenditures,” said Robert Ball, a former Social Security Administration commissioner who helped start Medicare, the federal health care insurance program for people 65 and older and for the disabled.

“The big story is that there is good reason now to hope for a rate of increase well below the average of 10% a year of the recent past,” Ball said.

Treasury Department figures show that payments from the federal hospital insurance fund, the biggest Medicare outlay that covers inpatient hospital bills, fell 4% from $135 billion in fiscal year 1998 to $129 billion this year.

White House and congressional negotiators agreed last week to restore $11 billion in payments to health care providers, cut in 1997. The government also spent more to fight fraud and abuse in the program, shelling out $742 million this year for anti-fraud measures, compared with $608 million in 1998.