Medicare Payment System: Aiding or Preventing Fraud?

NBC Producer, Investigations Inc.: By: Sabrina Korber, Published: Wednesday, 4 Apr 2012 | 6:37 PM ET.

American health care in the 21st century is a numbers game — literally. The Centers for Medicare and Medicaid Services provides coverage for 100 million Americans and processes some 4.5 million claims a day to the tune of $800 billion annually.

But that’s not all.

“Medicare is a big program. Medicaid is a big program. We have 800,000 physicians; we have 1.5 million providers and suppliers. We have these millions and millions of claims every day,” said Dr. Peter Budetti, deputy administrator for program integrity at the centers.

And the numbers don’t end there.

Health-care providers currently use a list of more than 18,000 diagnosis codes, known as International Classification of Diseases, 9th Edition (ICD-9), to bill Medicare and Medicaid. Next year, the number of codes will expand to more than 140,000, with the goal that more specific diagnoses will lead to better tracking of health-care trends and cut down on fraud, which costs taxpayers at least $80 billion a year.

The sheer size of ICD-9 makes it a minefield for some providers and suppliers submitting claims for payment and a potential goldmine for others. Read More