October 26, 2014

CONCORD URGES PREVENTION OF FUTURE MEDICARE OVERPAYMENTS, WARNS THAT ROOTING OUT FRAUD WON'T SAVE PROGRAM FOR FUTURE

WASHINGTON -- While urging the president and Congress to take steps to prevent future Medicare overpayments such as those uncovered by a recent audit, the Concord Coalition today warned that the savings from such an effort would not come close to making the program solvent over the next five years and beyond.

The audit of Medicare, released yesterday by the inspector general of the Department of Health and Human Services, estimated that the program overpaid healthcare providers by $23 billion last year.

"Taxpayers are justifiably outraged when told of the improper payments that occur in the Medicare program, and they are right to demand corrective action," said Martha Phillips, executive director of the Concord Coalition. "But unfortunately, these overpayments are not the primary reason Medicare's costs are growing out of control."

Phillips said the real cause of Medicare's rapid annual growth has to do with the lack of cost-saving incentives in the program, the brisk development of new technology, and changing demographics.

She said the estimate of overpayments uncovered by federal investigators -- which could total $115 billion over the next five years if left uncorrected -- pales in comparison to the $383 billion cash deficit Medicare Part A and Part B are predicted to run over the same time span. That $383 billion deficit, which must be covered by general revenues from the U.S. Treasury, is the amount of savings that would be needed over the next five years to keep the program from adding to the federal deficit.

"It is critical that we root out waste and fraud, but this effort must not be used as an excuse to avoid the reforms that are needed to save Medicare over the next five years and beyond," Phillips said. "Medicare is completely unsustainable in its current form with or without waste, and Congress and the president must act now to protect its future beneficiaries and taxpayers."