Payment Errors Continue To Plague Medicare Program

MATTHEW PERRONE

WASHINGTON (AP) — A federal program with a history of making billions of dollars in erroneous payments for wheelchairs, oxygen machines and other medical equipment continues to grossly underestimate its own mistakes, according to federal investigators.

The Medicare program spends about $10 billion annually in payments to suppliers of medical equipment for the elderly and disabled. For years, federal inspectors have documented payment errors that expose the program to fraud and abuse. Last year the inspector general who oversees Medicare estimated the waste could be as high as $2.8 billion annually.

A sampling of payments for fiscal year 2008 conducted by an outside contractor found that roughly 70 percent should not have been approved, according to a new report by the inspector general for the Department of Health and Human Services. But Medicare estimated the error rate at less than 10 percent, citing its own contractor, AdvanceMed of Richmond, Virginia. The review was not comprehensive and consisted of a sample of just 250 payments.

Peter Ashkenaz, a spokesman for the Centers for Medicare and Medicaid Services, said Tuesday that the agency "has made significant changes to how it measures the error rate and, in addition, has clarified its medical review instructions for contractors."