Making Dollars and Sense: How Nonprofit Healthcare Organizations Can Prevent Improper Payments

The Government Accountability Office (GAO) recently reported that the federal government made $105.8 billion in improper payments during fiscal year 2013. In fact, the report indicates that the Centers for Medicare and Medicaid (CMS) accounted for more than $60 billion alone in improper payments across programs. Despite the fact that the overall number of improper payments has decreased by roughly 12.5 percent since 2010, when they reached $121 billion, more can still be done to prevent these expensive oversights moving forward.

The federal government has begun to take steps toward reducing this waste and fraud. At a recent House Oversight Government Operations Subcommittee meeting, Beth Colbert, deputy director of management for the White House Office of Management and Budget said, “We have taken an aggressive approach to attacking waste, fraud and abuse within federal agencies, and we will continue to seek out new and innovative tools to help us in this fight.”

Congress has also taken action: Over the past four years, it has passed two bills aimed at exposing and eradicating these payouts. However, with the volume of improper payments remaining high, there are ample opportunities for both the public and private sectors, including nonprofit healthcare facilities, to strengthen their fraud, waste and abuse detection efforts and further reduce the magnitude of this issue.

How can nonprofit healthcare facilities help reduce the overall financial burden caused by improper payments? Here are several key strategies to keep in mind:

Co-educate physicians and coders on appropriate billing levels. Consider investing in on-site training or encourage your team to attend offsite workshops to help sharpen their coding and billing skills.

Ensure the hiring of credentialed physicians by conducting background checks on all new employees. This will help protect your organization from hiring censured physicians.

Assign chief compliance officers and compliance committees for added checks and balances, understanding that the prevention of overpayments is a full-time job that requires diligent, ongoing oversight.

Develop and implement billing compliance policies and procedures in conjunction with newly-established compliance officers and committees. Robust procedures and guidelines allow healthcare facilities to more effectively deter incorrect billing and the coverage of unwarranted medical procedures, which helps to reduce improper payments.

Be prepared to enforce billing and coding standards via disciplinary procedures. Be sure to respond to detected problems swiftly and promptly. When organizations firmly adhere to their standards and respond measurably to improper payments, it sends a powerful message to potential future offenders.
As both the government and the nonprofit healthcare community continue to focus on identifying, measuring and curtailing improper payments, what specific challenges is your organization facing? Let us know in the comments section below.

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