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We Need to Reduce Health Care Fraud

Reducing health care fraud is the rare policy priority shared by both parties in an increasingly divided Washington, and for good reason. Billions of taxpayer dollars are clearly at stake.

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Reducing health care fraud is the rare policy priority shared by both parties in an increasingly divided Washington. Just last summer strong majorities in the Senate and House of Representatives passed—without a single objection—a Medicare antifraud provision that cost hundreds of millions of dollars.

For good reason. The federal government’s own estimates of Medicare and Medicaid payment error rates run as high as 52 percent for certain medical supplies. The Government Accountability Office has declared Medicare, the government health insurance program for retirees, at high-risk for improper payments and fraud every year since 1990. Medicaid, the government health insurance program for the poor, joined the GAO’s high-risk list in 2003.

In 2010, an estimated total of $70.4 billion was made in improper payments for Medicare and Medicaid health services. This total includes $34.3 billion for traditional Medicare fee-for-service (a 10.5 percent payment error rate), $22.5 billion for Medicaid (a 9.4 percent payment error rate) and 13.6 percent for Medicare managed care alternative to fee-for-service (a 14.1 percent payment error rate).

Billions of taxpayer dollars are clearly at stake.

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