Medicare audits avoid real problems

Without a doubt, any program the size of Medicare is going to be dogged by both fraud and waste. And in theory, paying contractors on a commission is a cost-effective way to find questionable claims without staffing up the agency to a staggering degree.

The question is, can any program that uses commissioned claims hawks be fair to providers? I'd argue that the answer is no. Worse, it does nothing to address systematic problems with Medicare's internal process.

OK, I'll admit that a program that processes 4.5 million claims each work day--and a staggering 9,579 claims per minute--has one heck of a problem on its hands. It can't possibly review patient records routinely on that scale. But on the other hand, it doesn't make sense to completely punt and say "OK, we'll just turn it over and hope for the best." 

Turning over such a core part of its mission to outside contractors has the potential for big trouble, no matter how the contractors are paid; they still have a motive to find errors regardless of whether they actually exist. After all, recovery contractors who don't find errors don't keep their contracts, right?

So, what do you think Medicare should do? Is there an audit solution that doesn't give contractors the wrong incentives? Would the function have to go in-house to be fair, or move in a completely different direction? Write to me and tell me what you think.- Anne