A Promising Proposal to Reduce Waste in Medicare

Now that members of Congress have returned from the August recess, they have several big-ticket items to accomplish before the legislative year comes to an end in December.  One non-controversial item that could be taken up is the Protecting the Integrity of Medicare Act, which aims to reduce waste and fraud in Medicare. 

The proposed bill contains a total of 25 sections, many of which would enact commonsense provisions to restructure certain programs and eliminate profligate Medicare spending.  The bill was crafted with input from both Democrats and Republicans on the Ways and Means Committee, which indicates that it will likely receive broad, bipartisan support.  A few of these provisions are described in detail below:

Removing Social Security Numbers (SSN) from Medicare Cards

This section of the bill would prohibit SSNs from being displayed, encoded, or embedded on an individual’s Medicare card.  The Government Accountability Office (GAO) first recommended removing individual’s SSNs from government documents in 2002.  In 2008, the Office of the Inspector General (OIG) for the Social Security Administration also recommended that SSNs be removed from Medicare cards.  Since both GAO and the OIG have gone on record suggesting this change, it should be non-controversial.

Improved Use of Funds by the Department of Health and Human Services (HHS) Inspector General

This provision improves oversight and enforcement activities by providing the HHS OIG with up to 1.5 percent of all amounts collected from Medicare false claim and fraud cases.  These funds will be in addition to any appropriation provided for these activities.

Reducing Improper Medicare Payments

According to the summary of the discussion draft, “This provision requires the Secretary of HHS to direct each Medicare Administrative Contractor to establish an improper payment outreach and education program to provide information to providers of services and suppliers in the contractor’s region.  The information will include the provider’s or supplier’s most frequent and expensive payment errors, a notice of new topics that have been approved for audits by Recovery Audit Contractors, as well as specific instructions to correct and avoid errors and audit issues in the future.”

Exclusion from Medicare Program of Those Convicted For Defrauding Such Program

Another section of the discussion draft summary states that “This provision requires that providers who are convicted of defrauding the Medicare program lose their eligibility for Medicare benefits, with the ability to earn back the entitlement by working 40 honest quarters.  Current consequences for providers who commit Medicare fraud are very light and limited to their practice of medicine within Medicare.  Those who defraud the Medicare program should not be eligible to receive Medicare benefits unless they are able to re-earn the entitlement, protecting taxpayers from having to pay for the benefits of criminals who defraud seniors.”

Section 23 – Limiting Payments for Vacuum Erection Systems for Medicare Beneficiaries

This provision requires that the Secretary of HHS include vacuum erection systems (VES), more commonly referred to as penis pumps, in the Durable Medical Equipment Competitive Bidding Program by 2016.  According to a December 2013 report from the HHS OIG, Medicare payments for VES are more than twice as much as the amounts paid for the same or similar devices by non-Medicare payers.  Establishing a competitively bid rate will help to shrink the deficit while still allowing Medicare beneficiaries to pump up their private parts.

The legislation is currently in draft form and some important details of the bill, such as a Congressional Budget Office score of its cost or savings, are not yet available.  The Council for Citizens Against Government Waste (CCAGW) will review the bill when it becomes final. Based on the draft language, however, the legislation would enact several changes that CCAGW has called for in the past and would both save money and improve the integrity of the Medicare program.

  — P.J. Austin