Editorial: Insurers paid too much

Friday, Sept. 14, 2007 | 7:36 a.m.

Congressional investigators say the Bush administration has failed to adequately audit private insurance companies participating in Medicare, allowing the companies to keep millions of dollars in overpayments that should have been recovered.

In a Sunday story The New York Times reported that an audit by the Government Accountability Office, the investigative arm of Congress, says the $59 million in overpayments could have been used to provide Medicare beneficiaries with additional benefits, lower co payments or lower premiums.

Federal law requires that Medicare officials audit annually the financial records of at least one-third of the private companies participating in the program. The Bush administration, however, audited only 24 percent of the companies in 2001 and has audited fewer each year since, dwindling to 14 percent last year, the GAO reports.

Over this same period , Medicare payments to private companies have steadily increased, now totaling $75 billion annually, the Times reported. Medicare pays private insurers fixed monthly rates for patients' medical services. If private plans contain costs, they are supposed to share the money saved with Medicare beneficiaries and the government. Overpayments are to be recovered.

Medicare's own audits showed errors in 41 of the 49 companies it audited in 2003, the GAO found, but Medicare officials took no action. In speaking to the Times, Paul Caban, a GAO financial manager, said, "What is the value of conducting these audits if you do not act on the findings?"

Indeed.

The Bush administration did not dispute the findings. And a spokesman for the Centers for Medicare and Medicaid Services told the Times that the agency may need more authority from Congress to recover money paid in error to companies .

But the law already is clear. What else do they need - an engraved invitation to follow it?

This, however, is the Bush administration, which lavishes private companies with lucrative government contracts and then fails to hold them accountable for how they spend the money.