Medicare Fraud Program Cut—Congress Considers Higher Medicare Costs For Seniors

Medicare Fraud Program Cut—Congress Considers Higher Medicare Costs For Seniors

By Mary Johnson, Editor

Medicare thieves are robbing the program by as much as $60 billion a year. But that hasn't stopped recent automatic Medicare cuts from slashing the very program established to protect scarce Medicare funds from fraud and abuse. At a recent House hearing administration officials said the CMS Health Care Fraud and Abuse Control Program budget would be cut by $63 million this year due to the Medicare "sequester" cuts.

That announcement came only two weeks after the release of a new report showing that for every dollar spent on healthcare-related fraud investigations in the last three years, the government recovered $7.90. "The highest three-year average return on investment in the 16-year history of the program," according to a Department of Health and Human Services press release.

This is a perfect example of why automatic Medicare cuts are a shoot-yourself-in- the-foot bad idea. While our guys in the CMS Fraud and Abuse squads are put on extended furloughs giving fraudsters easy pickings, Congress is busy scrutinizing plans to squeeze more money out of seniors and disabled adults.

Consensus appears to be building for a new single deductible that would combine the deductible for hospital services with the deductible for doctor services. Beneficiaries would take a stiff hit to the wallet. Research indicates that higher deductibles and out-of-pocket costs tend to reduce the amount of healthcare services that people use. Policy makers believe the proposal would cut federal spending as seniors put off necessary healthcare. Most of the proposals for a single deductible start around $550. Some of the proposals would restrict Medigap plans from covering the amount.

Under current law, the Part A hospital deductible is covered by all Medigap policies and varies under Medicare Advantage plans. Eighty percent of seniors never have any inpatient hospital costs in any given year. The Part B deductible this year is $147. In addition, many policy makers would also prohibit Medigap policies from covering the new cost.

If that weren't enough, the Medicare Payment Advisory Commission (MedPac) recently recommended a new surcharge for beneficiaries who buy Medigap supplemental plans — which also has bipartisan support and included by President Obama in past budget proposals.

TSCL believes that Congress must stop the Medicare fraud money hemorrhage. "Doing so would eliminate two-thirds of this years forced budget cuts," observes TSCL Chairman Larry Hyland. What do you think of proposals to cut your Medicare benefits? Tell TSCL today.

Sources: "Medicare Fraud Program Faces Sequester Cuts, Official Says," Emily Ethridge, CQ Roll Call, February 27, 2013.