December 14,2004

Baucus Responds to Announcement of Medicare Error Rate

Senator Concerned over Extent of Improper Payments

(WASHINGTON, D.C.) – U.S. Senator Max Baucus (D-Mont.), Ranking Member of the SenateFinance Committee, today expressed concern over the Medicare error rate, a measure ofimproper payments calculated and publicized annually by the Centers for Medicare & MedicaidServices (CMS). CMS reported that the net Medicare error rate for Fiscal Year 2004 was 9.3percent, which translates into nearly $20 billion in improper payments. This year, for the firsttime, CMS measured the error rate using a new process that relies on more detailed data andcontractor-specific information.

“We must do a better job of reducing payment errors,” Baucus said. “The 41 millionMedicare beneficiaries who rely on the program for their healthcare deserve better,” hecontinued, “particularly in a time of tight budgets and a program that faces impending fiscalchallenges as the baby boom generation nears retirement.”

The 9.3 percent error rate is the highest for the Medicare program since 1997.

“I was pleased to hear that CMS Administrator Dr. Mark McClellan has committed toexpanding Medicare oversight in an effort to reduce the error rate, and I intend to hold him to hisword. Clearly, $20 billion is an unacceptably high margin of error in this program.”