Earlier this month, President Trump announced an Executive Order charging the Centers for Medicare & Medicaid Services (CMS) to propose annual changes to combat waste, fraud, and abuse in the Medicare program. From its inception in 1966, there have been policy concerns about installing program integrity methods to better protect taxpayers from fraud, waste, and abuse in Medicare. The challenge is to “pay it right,” which translates into paying the right amount, to legitimate providers, for covered, reasonable and necessary services made available to eligible beneficiaries while taking aggressive actions to eliminate fraud, waste, and abuse.

Government watchdogs routinely identify concerns about waste and abuse. The Government Accountability Office (GAO) has designated Medicare as a High Risk program since 1990 because of its size, complexity, and susceptibility to improper payments. In 2018, improper payments accounted for 5% of the total $616.8 billion of Medicare's net costs. As programs, such as Medicare and Medicaid become more complex, program integrity risks become increasingly difficult to recognize. New provider types have entered the program, including hospices, home health agencies, and federally qualified health centers. More challenging cross-ownership issues have emerged, such as one corporate parent owning various providers and provider types. Increasingly complex webs of affiliations can allow unscrupulous providers to simply appear, disappear if they come under scrutiny, and then re-appear as “new” entities.

When enacted into law, Medicare had 19 million beneficiaries. Today, there are almost 61 million of them and 10,000 new enrollees are added every day. When the programs began, Medicare and Medicaid accounted for only 2.3% of federal spending. That paltry amount has grown to 23.5% of federal outlays today. Some candidates hoping to be elected president of the U.S. are in favor of expanding Medicare, including making it a program that covers everyone in the U.S. even to the extent of eliminating private insurance coverage obtained through employment. Yet, rarely is it clearly stated how this expansion will be paid for without raising taxes nor is there any recognition of what mechanisms will be installed to combat chronic problems involving waste, fraud, and abuse.

Reducing Healthcare Administrative Costs

Following the success of enacting Medicare and Medicaid legislation in 1965 and making these programs available the next year, a steady drumbeat occurred throughout the remaining 1960s and much of the 1970s to expand the scope of coverage. The emphasis back then was to enact health insurance legislation to benefit a wider segment of the U.S. population. Health spending in the year 1960 was 5.2% of Gross Domestic Product (GDP). By 1970, it had increased to 6.9% while it currently is approaching nearly 20% of the world’s largest economy. The average cost of a stay in a hospital was $68 per day in 1970, but there were predictions that it could rise to $98 per day by 1973. Those figures seem risible in light of current health care spending patterns.

In late September 2019, the Omnibus Burden Reduction (Conditions of Participation) Final Rule came into effect in an effort to strengthen patient safety by removing unnecessary, obsolete, or excessively burdensome health regulations on hospitals and other healthcare providers. This rule is intended to advance CMS’s “Patients over Paperwork” initiative by saving providers an estimated 4.4 million hours previously spent on paperwork annually, with overall total provider savings projected to be approximately $8 billion over the next 10 years, giving physicians more time to spend with their patients.

Thousands upon thousands of regulations affect Medicare and Medicaid. CMS officials need to stay on the alert to determine where changes to obsolete, duplicative, or unnecessary requirements can be made to improve healthcare delivery and reduce unnecessary spending. An overall aim should be to improve patient care, jettison burdensome rules, and eliminate duplicative regulations. Voters would benefit from learning how political candidates for high public office would perform to achieve such objectives.

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HEALTH REFORM DEVELOPMENTS

Reducing Healthcare Administrative Costs

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