Emailed Medicare Data Is Misleading And Incomplete

October 28, 2009 3:41 pm ET — Melinda Warner

In an unsurprising move, some conservatives have sent around partial study results on health insurance denials in order to strengthen their argument against the public option.

The below email is starting to circulate among conservatives.  It is unclear whether "Rev. Wayne Perryman" is either a real person or even actually wrote this email - these viral emails often attribute the content to fake names. 

That's the thing about these long reports that are full of data.  You can easily pull out the simplest part if it supports your argument.  The chart is taken from the "2008 National Health Insurer Report Card" commissioned by the American Medical Association (AMA).

By only including one chart from the report and without including any of the other pertinent information, this email tricks its readers into thinking that is the entirety of the report - when, actually, the report reveals some interesting aspects of the Medicare system.

Metric 12 indeed shows that Medicare denies more claims that the other entities examined.   However, a look at Metrics 13 and 14 offers a breakdown of all the reasons why claims were adjusted or denied. 

Based on the code descriptions in the expanded metrics, it is clear that 33.6% of the adjustments in Metric 13 and 37.7% of the denials in Metric 14 were issued because of faulty reporting on behalf of the providers - doctor's offices, hospitals, etc.  None of the other entities experienced those levels of provider errors.

Metric 13 shows that 159,501 of the denied claims were given reason codes indicating an error on part of the provider (codes 16 and 31).  Of the total 475,566 adjusted claims, that means 33.54% of the claim adjustments occurred because of provider error - such as a hospital claiming a reimbursement for a patient not insured by Medicare.

Metric 14 shows that 115,787 of the denied claims were given Remark Codes that indicated a reporting error on part of the provider (codes N365, M27, N286, N285, N269, N270, N290, and M15).  Of the total 252,882 claims in this group, that means 45.79% of these claim denials occurred because of provider error - such as claiming reimbursement for a non-payable procedure.

None of the other insurers report nearly as many errors submitted on part of the providers.  Now, whether these are intentional errors (and therefore fraud) or are simply accidents is not at issue here. 

What is at issue is the fact that at first glance Medicare does deny more claims than private insurance corporations.  However, private insurance firms do not experience nearly the same number of reporting errors as Medicare.

One of the key portions of progressive health care reform proposals is reducing waste and fraud within the Medicare and Medicaid systems.  This report card makes that need obvious.  Whether it's reforming reporting procedure, streamlining the forms doctors and hospitals have to fill out, or making it more difficult for reimbursements to be made for non-medical procedures - the system desperately needs to be fixed.

Emails like the one above only serve to confuse the debate and lead to Americans fighting against health care reform based upon faulty information.  Democratic proposals to reform our health care delivery system include measures to cut billions of waste from Medicare - which will leave those administrators who sift through these claims time to ensure quality treatment for every American senior.