[Page: E97]---
[Page: E98]
Source of overpayment | Cost to medicare | Source of analysis |
Overpayments due to BBA change that removed HCFA's ability to recover overpayments when health care inflation is lower than expected | $800 million in 1997 $8.7 billion over 5 years $31 billion over 10 years | Congressional Budget Office. |
Overpayments due to lack of risk adjustment | 5-6% overpayment to HMOs per beneficiary who is enrolled | Physician Payment Review Commission (now MedPAC) 1996 Annual Report. |
Overpayments due to inflation of Medicare's share of plan administrative costs | More than $1 billion annually | HHS Office of Inspector General July 1998. |
Overpayments due to inclusion of fraud, waste and abuse dollars from FFS payments. Managed care plans should better ``manage'' and therefore avoid such fraud, waste and abuse | 7% annual overpayment Annual savings with a corrected 1997 base year would be: $5 billion in 2002 $10 billion in 2007 | HHS Office of Inspector General Sept. 11, 1998. |
END