Medicare’s finances are full of waste

A new report just uncovered millions of dollars in Medicare waste. The report, from the Office of the Inspector General at the Centers for Medicare and Medicaid Services, found that the agency paid for some of the same drugs twice, wasting $160 million.

Unfortunately, this is only the latest example of Medicare squandering taxpayer dollars.

The OIG’s report analyzed two segments of Medicare: the Part A hospice benefit and the Part D prescription drug benefit. The hospice benefit provides special care for Americans living with a terminal illness. CMS pays hospice organizations a flat rate for each day a patient is in hospice. That rate is designed to cover all the services those organizations may provide, including the cost of drugs used primarily to control patients’ symptoms and relieve pain.

Consequently, Part D should not pay for those drugs the hospice benefit is supposed to cover. Yet Medicare did just that.

The inspector general analyzed 200 Part D records in the report and found that hospices received payments they shouldn’t have in 86 cases. In other words, Medicare made incorrect payments in 43% of the cases the OIG looked at. The total hit to taxpayers was $160 million.

Even worse, this has happened before. In a 2012 report, OIG officials uncovered $33 million of the same kind of duplicate payments in 2009.

Sadly, Medicare’s waste is not limited to the hospice benefit. An auditor revealed that Medicare Advantage had an improper payment rate of 10% in 2016. That’s equivalent to over $16 billion. That same year, the conventional Medicare program made $41 billion in erroneous payments.

Taxpayers shouldn’t stand for Medicare wasting billions of their hard-earned dollars.

Sally C. Pipes is president, CEO, and Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is The False Promise of Single-Payer Health Care (Encounter). Follow her on Twitter @sallypipes.

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Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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