WASHINGTON -- President Clinton's first budget proposal for fiscal 2000 is a crackdown on Medicare fraud and abuse that could save the government $2 billion in health payments.
The president was unveiling a package of legislative initiatives Monday that would help the Health Care Financing Administration combat wasteful or abusive practices in the Medicare system, such as padding drug prices or billing for services that were delivered barely or not at all.A White House official who discussed the proposals Sunday said Clinton was taking this action to "ensure that not one dime of the program's trust fund is wastefully spent," especially as the Medicare Commission works to extend the life of the program beyond 2010.
Altogether, the package is expected to save Medicare at least $2.1 billion, said the official.
The plan includes eliminating markups in the prices Medicare is charged for drugs, so Medicare would pay only what a drug costs the provider. Medicare covers only certain drugs that must be administered by a doctor or in a hospital, such as those used for dialysis or organ transplants.
An inspector general's report by the Department of Health and Human Services found that markups for 22 drugs cost Medicare hundreds of millions of dollars annually. Medicare paid more than twice the average wholesale price for certain drugs -- and in one instance paid roughly 10 times the wholesale price, the investigators found.
Clinton's proposal, if accepted by Congress, also would:
Reduce Medicare reimbursements for Epogen to reflect market prices. The HHS inspector general found that the current reimbursement rate for Epogen, a drug used to treat anemia due to chronic renal failure, is 10 percent higher than the cost of the drug.
Prevent care providers from billing Medicare for services that either were not given or were provided only to a few patients. That would close the door on one of the most abused benefits, group therapy.
Require private health insurers to report which Medicare beneficiaries they insure, to prevent providers from billing Medicare for claims owed by private insurers.
Under the proposal, HCFA would have the authority to recover twice the amount owed by insurers who allow Medicare to pay claims they owe and to impose fines for failing to report legal settlements where Medicare should have been reimbursed.
Clinton also announced efforts HCFA will make to ensure that Medicare contractors try to ferret out fraud. They include memorandums being sent this month telling all contractors they are required to refer suspicious providers to the inspector general's office.