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By Tom Barnes

HARRISBURG -- The federal government has encouraging news for the state's Department of Public Welfare, as a new survey puts the error rate on Medicaid claims at just over 4 percent, Gov Ed Rendell said today.

Democrat Rendell, who released the U.S. Department of Health and Human Services report, said the error rate in Pennsylvania is far below the national error rate on Medicaid claims of nearly 9 percent.

It's also a far cry from state Auditor General Jack Wagner's recent report putting the error rate at about 14 percent. That error estimate has prompted criticism from numerous legislators, mostly Republicans, including Sen Jake Corman, who are looking at major cuts in welfare/Medicaid spending as a way to balance the next state budget.

"We have made great strides to reduce Medicaid payment error rates in recent years,'' said Mr. Rendell, who leaves office Jan. 18. Medicaid is a program, funded by the state and the federal governments, that pays for medical care for lower-income people, senior citizens and disabled people.

Errors include such things as giving Medicaid payments to people who don't meet income limits, making clerical errors on how services are billed or paying out more than a procedure actually cost.

Incoming Republican Gov. Tom Corbett is expected to face a deficit of between $3 billion and $5 billion for the next fiscal year, and many people have point to Medicaid and other DPW spending as a way to close that budget gap by $1 billion or so.

But Mr. Rendell said he's tired of seeing DPW used as a "convenient whipping boy'' for misinformed critics of his administration.

He said the new federal report it disputes the idea that DPW is wasting money. He also said legislators are mistaken if they think $1 billion can be cut from the DPW budget on July 1, the start of fiscal 2011-12. He said that would cause serious harm to senior citizens and disabled people, who receive much of the spending under Medicaid, a $7 billion annual item in the state budget.

Mr. Rendell said he couldn't explain the large difference between the feds' 4 per cent error rate and higher rate claimed by Mr. Wagner.

Mr. Rendell said the feds use a standardized program called the "Payment Error Rate Measurement'' to check for wrongful eligibility of participants or payments that are too high.

The Centers for Medicare and Medicaid Services, the federal health agency that did the new audit, "has an excellent track record,'' he said.

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