Tribes Overpaying for Medical Services

During just one three-month period in 2008, the Indian Health Service and tribes paid $14 million over the Medicare rate for medical services, according to a Health and Human Services Inspector General’s report released last week. The money for the services comes from the Contract Health Services program -- a program so cash-strapped every year that it cannot cover medical care for tribal members for a full fiscal year, giving rise to the wry admonishment frequently heard in Indian Country … “Don’t get sick after June.”

Between January and March last year, IHS and tribes paid above the Medicare rate for 22 percent of hospital claims, resulting in $1 million in overpayments. But most overpayments were for hospital outpatient claims. If IHS and tribal payments for non hospital claims were capped at the Medicare rate, they could have saved as much as $13 million between January and March 2008.

While 22 percent of hospital claims were paid above the Medicare rate, the resulting overpayments only accounted for 3 percent of the total $33 million that IHS and tribes spent on hospital claims between January and March 2008, according to the report. IHS and tribes paid above the Medicare rate for 71 percent of non hospital claims. Most of these claims paid above the Medicare rate were for physician services.