Congress Eyes Bill To Reform Medicare Audit Process, Save Taxpayer Money

A bipartisan group of Senators is working on legislation that could do more to stop egregious government waste – and save taxpayers’ money – than almost any other proposal on the horizon.

The bill, from Sens. Orrin Hatch (R-UT), Richard Burr (R-NC) and Ron Wyden (D-OR) would reform how the government reviews whether the payments it issues were done correctly.

It’s a critical issue because, every year, the government wastes tens of billions of dollars in the form of improper Medicare and Medicaid payments to hospitals and other vendors.

Such payments have exploded during the Obama years, according to the Government Accountability Office (GAO), which estimated the annual waste from Medicare and Medicaid at $77.4 billion.

In recent years, a new audit system helped the government recover more than $10 billion in waste, but thousands of appeals from some of the former beneficiaries of those payments have brought the system to a grinding halt.

The Hatch-Burr-Wyden bill seeks to streamline the audit process to ensure that a handful of Medicare providers can’t disrupt the entire audit system to shield their wrongful payments from accountability.

Last year, congressional testimony from a top Obama official revealed that just five companies had filed a shocking 51 percent of all appeals.

The testimony, which came under questioning from Wyden, caused a mini-scandal in the green eyeshade world of government budgeting and appears to have been one of the catalysts for the bill that he and his two Republican colleagues just introduced.

“The voices of too many patients, providers, and states are going unheard because the gears of the Medicare audit and appeals system have ground to a halt,” Wyden said in a press release touting the bill.

The release also details how severe the issue has become. Some types of appeals have seen a 936 percent increase, and the vast majority of decisions are being issued well after a 90-day deadline set explicitly in the law.

The dysfunction is part of a little-known but fiercely fought battle between the auditors and hospitals and other companies that are paid by Medicare.

The audits in question are conducted by private companies that are paid a small portion of any monies they flag that are subsequently recovered by the government, similar to a growing class of whistleblower reward programs. This program is called Recovery Audit Contractors (RAC).

The structure has proven highly effective at identifying fraud, as well as triggering the wrath of its well-financed beneficiaries, who have spent tens of millions lobbying Congress to water down the program.

Critics of the RAC program frequently point to the appeals process to argue that the program is flagging all sorts of routine and legitimate payments, while also claiming hardship from the delays involved.

Of course, that’s quite convenient when the backlog was caused by an extremely small group of companies that stand to benefit if the appeals process grinds to a halt.

But if the Hatch-Burr-Wyden bill has its day, there will be one less excuse for those padding their profit margins by defrauding the government on an almost unimaginably large scale.

The trio should be commended for their hard work, and Congress should move quickly to bring up the bill.

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