Report: Arkansas improves on Medicare overpayment, still among worst in the nation

Overpayments recorded in Arkansas totaled $14.21 per Medicare participant in 2015, one of the highest levels in the United States, according to a report from the Council for Medicare Integrity.

Arkansas ranked No. 10 in the report – based on waste per participant – with a total of $6.672 million in Medicare overpayments made in 2015 for its combined 469,450 participants. Medicare overpayments relate to when a provider inaccurately bills the program for the services they provided to a patient, most often billing to a code that pays out at a higher rate than what’s approved, according to the report.

Arkansas ranked slightly better than California, who wasted $14.72 per medicare beneficiary totaling overpayments in excess of $47.704 million. The most wasteful state was the District of Columbia, though small in terms of beneficiaries, the per capita waste was a record $30.90 for a total of $2.35 million.

“Medicare loses more money to improper payments than any other program government wide – more than $43 billion was lost from the program this way in FY2015 alone,” said Kristin Walter, spokesperson for the Council for Medicare Integrity, a nonprofit aimed at reducing overpayments. “These improper payments are causing Medicare to hemorrhage billions of dollars desperately needed to help sustain the program.”

Nationwide the level of overspending combined with an onslaught on new Medicare enrollees is putting the program in financial jeopardy with a projected bankruptcy by 2028, according to Walter.

“It’s more important than ever that everyone become aware of this problem and that work is done to drastically reduce improper payments in Medicare to sustain the program for those who will need it in the future,” Walter added.

The Centers for Medicare & Medicaid Services reports the number of Medicare enrollees are increasing by about one million per year with more than 72 million participants as of last year. A huge demographic depends on the program to provide critical health services such as flu shots and diabetes screenings to hospital stays, lab tests, wheel chairs and a prescription drugs taken daily.

The report also notes some progress made by Arkansas to better control Medicare wastes. In 2014, Arkansas was ranked the second most wasteful behind the District of Columbia, but moved to No. 10 in 2015, the last year records are available. Walter said
Mississippi, North Dakota, Colorado, New Mexico and South Dakota were also among the 10 most wasteful in 2014, but they improved enough to move off that list in 2015. Meanwhile Texas, Louisiana and Oklahoma, all border states to Arkansas, moved higher in the wasteful rankings from 2014 to 2015.

Arkansas’ number of Medicare participants is just under 500,000, another 121,903 residents across the state take part in an Medicare Advantage plan from local or regional care providers. There are more than 403,326 Arkansas residents taking part in stand-alone prescription plan drug plans or Part D Medicare drug plans.

The Recovery Audit Contractor report released in early 2016 found the Medicare Fee-For-Service (FFS) division to have the highest amount of improper payments across all government agencies for each of the past six years. In 2014 the Government Accountability Office (GAO) found that Medicare FFS overpaid providers by $46 billion – or 12.7% of payments. Of these improper payments, more than 84% of overpayments collected (more than $2 billion) came from inpatient hospital claims. For 2015 the Medicare FFS program was reported to have incorrectly paid $43.3 billion – or 12.1% of payments – improperly to Medicare providers.

While Congress had some success recovering overpayments in 2013 and 2014 from the Recovery Audit Contractor report it’s a slow and tedious process. Report authors identify the top areas where overpayment is common as being durable medical equipment, home health claims, Medicare Part A & B pharmacy claims, diagnosis related groups and therapy cap reviews.

The most egregious examples of Medicare billing include:
• Home health episodes that begin after beneficiary’s death;
• Drugs paid for ten times the amount administered;
• Oncology radiation calculations billed one week before the patient was seen in the office;
• Hospital claims coded with illnesses the patients didn’t possess;
• Duplicate provider billing for medications; and
• Excessive units of medication billed for but not given.