President Signs “Improper Payments Elimination” Bill

President Obama signed the Improper Payments Elimination and Recovery Act (IPERA) July 22. The bill is designed to cut waste, fraud, and abuse due to improper payments by federal government agencies. Areas with a history of improper payments, such as chiropractic services, will be targeted.

In 2009, improper payments totaled nearly $110 billion—the highest amount to date. This includes tens of billions of dollars in payments made in error or because of fraudulent claims by contractors and organizations as well as more than $180 million in improper payments sent to individuals who are dead and $230 million in improper payments to prisoners and fugitives—none of whom qualify for benefits.

The president has instructed his administration to reduce these improper payments by $50 million by 2012 and to create a “Do Not Pay” list—a consolidated database of every individual and company that is ineligible for federal payments.

“Before checks are mailed, agencies will be required to check this list to make sure the payment is going to the right person, in the right amount, for the right reason,” President Obama said before signing the bill in the White House.

The bill outlines steps federal agencies will need to take to reduce and recover improper payments, including:

  • Identification and Estimation of Improper Payments. IPERA requires agencies to conduct annual risk assessments, and if a program is found to be susceptible to significant improper payments, then agencies must measure improper payments in that program. Further, over time, IPERA lowers the threshold for determining a program is susceptible to improper payments.
  • Payment Recapture Audits. The bill expands the types of programs that are required to conduct payment recovery audits (from contracts to all types of programs and activities, including grants, benefits, loans, and contract payments), and lowers the threshold for programs and activities that must conduct these reviews if cost-effective (from $500 million to $1 million in annual outlays).
  • Use of Recovered Improper Payments. IPERA also authorizes agency heads to use recovered funds for additional uses than currently allowed, including to improve their financial management, to support the agency’s Office of Inspector General (OIG), and for the original intent of the funding.
  • Compliance and Non-Compliance Requirements. Currently, if an agency does not reduce improper payments or implement the existing law, there are no repercussions. Under IPERA, there is a list of actions that an agency must take to be in compliance with the law, and the agency Inspector General is responsible for determining whether the agency is in compliance with the law. If the agency is found not to be in compliance with the law, then IPERA contains a series of actions that the agency must take to improve its error reduction efforts.

Chiropractors Targeted

According to WPS Medicare, chiropractic services fall within the list of four supplemental measures listed in the strategy developed by the federal government. Chiropractic physicians throughout the Medicare administrative contractor’s (MAC’s) jurisdiction 5 (Iowa, Kansas, Missouri, and Nebraska) will be part of the national review aimed at eliminating payment error, waste, fraud and abuse in federal programs.

Beginning August 2010, Comprehensive Error Rate Testing (CERT) contractors will begin requesting records from chiropractic offices as part of a Special Studies request. Unlike traditional CERT requests, Special Studies requests use targeted samples, focused scripts and allow only 30 days for submission of requested medical records.

Other measures include those for power wheelchairs, inpatient hospital short stays, and pressure reducing support surfaces.

For additional information, refer to the Medicare Fee-for-Service portion of the Payment Accuracy website by clicking on “High Error Programs” at the top of the page.

The IPERA is available for viewing on The Library of Congress website.

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9 Responses to “President Signs “Improper Payments Elimination” Bill”

  1. laf says:

    what about the remaining 109,950,000,000 dollar improper payments?

  2. Penny S says:

    Once again, needlessly increasing the size of government, when all they have to do is enforce the laws already on the books!

  3. Anne B says:

    Dittos to what Penny S said!

  4. Judy C says:

    Penny you must not have read this article. It’s not increasing the size of government, because the program is funded by recovered funds, not by new revenue. And it provides for the first time, recovery of fraudulently obtained funds issued by CMS contracted insurance carriers in error, because it actually provides a deadline for them to do this, and it has penalties if they don’t. Up to now, Medicare administrators had no incentive to do internal audits and even capture the data re: erroneously or fraudulently issued payments, except a pat on the back. Now, the government makes them accountable and responsible for cooperating with OIG auditing and responsible for going after the funds, if its feasible financially. Once again, you probably howl about improper payments and carrier errors, the massive amount of money we taxpayers are losing, but when there are stricter measures to make payors accountable, you think its intrusion into private enterprise. You can’t have it both ways.

  5. JendC says:

    I have two comments on opposite sides. First- yeah! Making insurance carriers accountable for improper payments might mean that my coding students will be able to get jobs with insurance carriers. Undoubtedly regulations like this mean more opportunity for people with coding skills.

    Second, I hope that the carriers go after repayment and don’t force these folks into the “Fraud” category “accidentally”. We all know providers who just never learned to code/document properly and may have been overpaid. Granted that ignorance of the rules are no excuse, it does happen. I just hope that mistakes are not taken as intentionally committing fraud.

    (And probably making myself unpopular, I hope that taxes get addressed so the government can start hiring the people back that it had to let go so they can get out of the job pool and allow me and my students to prosper in the private sector.)

  6. Julie says:

    This program does not increase the size of government. Rather, it outsources auditing activities to private companies (hence, private sector employment opportunities) and shifts the focus from fraud to recapturing improper payments, something that generates healthy bipartisan support in Congress.

  7. Jean Colley says:

    The article above contains an error: “The president has instructed his administration to reduce these improper payments by $50 million…” It should be $50 BILLION.

  8. Julie says:

    I went back and reread this article after reading Deb Grider’s “Letter from the President and CEO” and believe that her article is timely in that the focus is shifting to payment integrity, which includes auditing and compliance. Coding professionals are going to benefit from these new efforts but as Deb said, we need to professionally evolve……

  9. Chris says:

    I agree with Penny – the agencies making these payments should be “walking the walk” already – if they aren’t properly monitoring/paying then FIRE them, shut them them down as they are now structured and create a whole NEW structure to REPLACE them, not add on top of them. Never in the history of our country, has there ever been a single ADDED government program that A) “paid for itself” or B) Didn’t cost us more in both $$ and time. Does anyone honestly believe this so called “do not pay” list is going to be accurate and/or enforced? Come on, fraud money is like drug money – those who are after it are criminal and will continue to find a way to circumvent the laws. These agencies are going to continue to cost the taxpayer and honest patients and providers more $$.

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