To Cut Spending Waste, Congress Should Restore Medicare RAC Programs

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Stack of Fifty Dollar Bills

By Christopher Versace

If a corporation discovered it had made thousands of dollars in improper payments, it would, not doubt, undertake every step to stop the wasted money and collect the improper payments. The federal government, however, acts under a different set of rules.

During each of the last five years, agencies have doled out more than $100 billion in erroneous payments from various major benefit programs. Improper payments include overpayments to people or vendors, spending without sufficient documentation, or checks sent to the wrong people – even dead people).

The program that is now being put under the microscope is Medicare and Medicaid, which paid out an estimated $60 billion in improper payments during 2013 alone. Much of those payments have been to hospitals likeLifePoint Hospitals LPNT +1.1%, Community Health Systems (CYH), HCA Holdings HCA +1.53% and Universal Health UHS +0.48% (UHS) among many others.

Federal auditors have flagged Medicare’s Fee for Service as its error rate jumped to 12.7% in 2014 up from 10.1% in 2013 and 8.5% in 2012 according to the Department of Health and Human Services Inspector General.

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