Feds To Curb Improper Payments To Medicare Plans

The Obama administration says it's taking steps to fix a longstanding problem of improper payments to private health plans that serve 1 in 4 Medicare beneficiaries.

So-called Medicare Advantage plans face tighter audits under a policy issued Friday. The rules say Medicare must pay the plans a higher rate to care for sicker beneficiaries. But previous government audits discovered many claims were not backed up by proper medical documentation.

Medicare deputy administrator Jon Blum says he doesn't call it fraud, but it is a problem. The estimated error rate of 11 percent added up to $12 billion in improper payments last year.

The Obama administration says it wants to gradually reduce erroneous payments while maintaining quality. Medicare expects to save $370 million beginning this year, and more over time.

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