Audit: HHS fails to accurately report and prevent improper payments

A recent audit of the Department of Health and Human Services (HHS) to determine if the agency is in compliance with the reporting standards required under the Improper Payments Information Act (IPIA) of 2002 found an ongoing failure by the agency to accurately report and prevent improper payments.

The audit, conducted by Ernst & Young LLP, found the agency failed to achieve its goal of a less than 10 percent improper payment rate in FY 2015 for Medicare Fee-For-Service. Its overpayment rate in 2015 was 12.1 percent, slightly less than the 12.7 percent in 2014 but higher than the 10.1 percent in 2013. Overall, the report found that HHS reported about $125 billion in overpayments during those three years.

Improper payments can result from billing errors or outright fraud. It’s important to note that some payments may have been proper, but were labeled improper because of a lack of documentation that would confirm the payment was in fact accurate. It’s also important to note that improper payments can be both over- and under-payments.

The IPIA requires federal agencies to identify programs and activities susceptible to improper payments and report information about those payments each year.

Because this is the third year that Medicare Fee-For-Service has exceeded the 10 percent threshold HHS will have to submit plans to Congress on how it will come into compliance with the IPIA.

HHS identified the primary causes of the Medicare Fee-For-Service improper payments as insufficient documentation and medical necessity errors. Insufficient documentation was particularly prevalent for home health claims, increasing 7.57 percent in FY 2015 from FY 2014.

The report also found that HHS published and met annual reduction targets for just three of the seven programs for which it reported reduction targets in the FY 2014 financial report and reported an improper payment rate of less than 10 percent for six of the eight programs OMB deemed susceptible to significant improper payments and all seven programs under the Disaster Relief Appropriations Act.

Among other findings: HHS did not meet improper-payment-rate reduction targets for the Medicare Advantage program, Medicaid, the Children’s Health Insurance Program, and the Child Care Development Fund program; and did not conduct recovery audits for the Medicare Advantage program.

This report is another example of the federal government’s commitment to crack down in improper payments and waste. Last year, White House budget director Shaun Donovan, in a letter to the Secretary of Health and Human Services called for a more “aggressive strategy†to prevent improper government payments to healthcare providers and insurers noting that billions of taxpayer dollars are being wasted annually on improper payments.

The Health Law Offices of Anthony C. Vitale assists healthcare providers in assuring that they are receiving proper payments from federal agencies and that they are in compliance with all rules and regulations governing such payments.

You can read the full report here.

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