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Medicare And Medicaid Report

The Centre for Medicare and Medicaid Services recently released their annual report on Medicare and Medicaid integrity programs. According to the report, Medicare has saved $12.40 during the financial year 2013-14, for every dollar they invested for program integrity. During the fiscal year 2013, the program integrity has saved around $21.1 billion, where the savings for 2014 was $18.1 billion; which means that the Medicare and Medicaid program integrity has saved roughly $40 billion over the two-year period.

CMS spent about $1.5 billion for Medicare program integrity during FY 2013 and the amount rose to $1.6 billion the next year. During a press release, the agency announced that their transition from “pay-and-chase” system of fraud recovery to a better method of preventing fraud and improper payments has been increasingly effective in the last couple of years.

CMS used a combination of results obtained from various integrity programs and calculated their Return on Investment. The study found that:

Majority of the integrity savings were the result of preventing improper payments: During the 2013 fiscal year, $14.4 billion (around 68.4% of 2013’s total savings) was made possible by preventing fraud and improper payment integrity activities. The same accounted for $13.4 billion in FY 2014 (around 73.7% of the total savings). Provider Revocations, Systematic Edits, Payment Suspensions, and Prepayment Reviews, are examples of the prevention strategies undertaken by CMS. During 2013 financial year, CMS had 484 active payment suspensions, which increased to 507 during the 2014 financial year.

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Annual Report By CMS

The remainder of the savings was accounted by overpayment integrity activity recovery: During 2013 financial year, around $6.7 billion was collected by keeping the overpayment activities in check. The same measure helped to save around $4.8 billion during the 2014 fiscal year. Recovery Audit Collections, Reviews and Audits, and Law Enforcement Referrals, were the key strategies employed for overpayment recovery.

The $40 billion saved is unusually high in contrast with the previous year’s records of the Medicare and Medicaid integrity programs. Some experts suggest that the extraordinary savings were the result of large pharmaceutical settlements.

The savings figures expected for 2015 financial year will be released later this year, and CMS has stated that the preliminary figures indicate a continuing increase in the savings recorded during the 2013-14 financial year.