Medicare Celebrates 50th Anniversary, Americans Concerned For Program's Future

Medicare will turn 50 years old. As the program celebrates this milestone, many Americans – and Medicare Trustees – are concerned about its financial future.

A startling Medicare Trustee report has warned that the Medicare Trust Fund may not be around to support future generations, predicting that the fund will be insolvent in just 15 years, by 2030, due to a continued increase in medical costs combined with an aging population. These changing demographics will cause Medicare spending to rise as a share of federal revenues from 17 percent in 2014 to 27 percent in 2050 and to approach 40 percent by the end of the century – if the program even lasts that long.

In addition to a surge in enrollment, a recent Government Accountability Office (GAO) report states that rampant improper billing exists within the Medicare program, threatening the future of the program. In 2014 alone, the improper payment rate rose to 12.7 percent – the highest in program history. Medicare overpaid hospitals and other healthcare providers nearly $46B for services that were unnecessary or billed improperly. The report also identifies Medicare as the government program with the highest level of improper payments.

Stresses on the program have caused more than half of Americans to lack confidence in Medicare’s ability to continue to provide future beneficiaries the same level of benefits provided today, according to a recent Kaiser Family Foundation (KFF) poll. Two-thirds of those surveyed support changes to the program to ensure it’s around for future generations.

“Medicare is vulnerable, it’s future is in question,” said Kristin Walter, spokesperson for the Council for Medicare Integrity. “Today’s program challenges are overshadowing all that Medicare has accomplished over the past five decades.”

Today, Medicare providers frequently overbill the program for services that are either not medically necessary or coded improperly according to Medicare policy. As a result, in 2006, Congress mandated the creation of the Recovery Audit Contractor (RAC) program to help protect the integrity of Medicare’s funding. RACs review only 2 percent of post-payment Medicare claims; identify areas where improper billing is taking place; correct the claims and request that the overages are paid back to Medicare. The federal government pays nothing up front for RACs to do this work; instead, RACs must be highly accurate in order to get paid.

The RAC program has returned $10B to the Medicare Trust Fund and extended its lifetime by two years.

Despite this success, the American Hospital Association has spent tens of millions of dollars lobbying Congress to shut down the RAC program.

“When you consider that hospitals comprise a $988B industry that in 2012 made $20B in profits nationwide, and that nearly half of all Medicare beneficiaries live on incomes of less than $24,000 per year, the industry push to cripple oversight of Medicare billing is appalling,” said Kristin Walter, spokesperson for the Council for Medicare Integrity. “As we celebrate Medicare’s success after 50 years, we must also take a hard look at the special interest groups draining the fund for their own personal gain and put safeguards in place to ensure the program is around for the tens of millions of American taxpayers that rely on the program every day.”

For more information, visit www.medicareintegrity.org.

About the Council for Medicare Integrity
Founded as the American Coalition for Healthcare Claims Integrity in 2009, today the Council for Medicare Integrity is a non-profit organization committed to working toward achieving 100% accuracy in payment claims submitted to public and private sector healthcare payors. The coalition’s mission is to educate policymakers and other stakeholders regarding the importance of healthcare integrity programs that help identify and correct improper payments.