TRENTON -- New Jersey has the dubious distinction of being near the top in the nation for both wasteful spending of Medicare dollars and for hospital Medicare billing errors, a new report finds.
The Council for Medicare Integrity, a non-profit that seeks to educate policymakers on health insurance waste found that in 2015, found that the Garden State had the some of the highest levels of Medicare over-payments -- nearly $23 million -- with only California and Texas over-paying providers more.
It also found that New Jersey's hospitals are fourth in the nation for Medicare billing errors, something that the state's 1.25 million Medicare recipients will likely want to note. The needless waste adds an extra $18 to every Medicare participant's premium annually.
The solution, the report said, is to implement an auditing process before paying providers for their services.
Nationally, the billing error rate is 11 percent, which translates to a loss of $41.1 billion from Medicare in a single year. For the past three years, more than $130 billion was inappropriately drained from the Medicare Trust Fund due to improper payments.
Medicare vs. your old health plan
After Congress passed the Medicare Modernization Act in 2003, it established an audit program to identify and recover improper Medicare payments, but only after payment was made to healthcare providers. Auditors have recovered more than $10 billion in improper payments, prolonging the life of the Medicare program by two years.
But after hospital lobbyists complained, the federally mandated audit program was limited to reviewing just .05 percent of a provider's claims.
That "defies logic," said Kristin Walter, a spokesperson for the Council for Medicare Integrity.
"With more than $166 billion erroneously paid out to providers over the past four years, it's clear we need much more auditing oversight, not less," she said.
The Council's report noted that Medicare currently offers medical providers the ability to settle appeals of payments flagged by auditors for 68 cents on the dollar, and that many hospitals often agree to settle.
A June 2016 report from Medicare's board of trustees found the Medicare trust fund will be insolvent by 2028.
Meanwhile, there is at least some good news in the Council's report: It also found that such billing discrepancies were actually at their lowest level in four years, were not fraud and that the bulk of them were made by hospitals, and not by the state of New Jersey itself.
Claude Brodesser-Akner may be reached at cbrodesser@njadvancemedia.com. Follow him on Twitter @ClaudeBrodesser. Find NJ.com Politics on Facebook.
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