Cutting Through Medicare Red Tape

March 5, 2009

red tapeBy Jim Ross:

Taking on the Medicare bureaucracy can be daunting for the average citizen. And the snarls in the process are costing us all a lot of money.

If you try, you’ll need a big dose of patience, hours of free time to hassle with bureaucrats, and your own filing system to keep track of the ever changing excuses justifying the latest mistake.

Ask Bill and Nancy, two victims who recently told their story to the Consumer Warning Network. After 14 months, six inches of paperwork and dozens of phone calls to Social Security, Medicare and a private health care company, they finally cried “Uncle!”

Depending on who they talked to, they learned that they:

1) owed the government $964; or

2) were due a refund of $658; or

3) had declined Medicare Part B coverage; or

4) were covered all along.

Social Security finally resolved matters only after an assistant regional director personally intervened to forestall their complaints to Florida’s senators and the agency’s Inspector General, which already is investigating payment problems nationwide.

Even with this clout, it took two more weeks to unsnarl the red tape, put the correct coverage in place and refund Bill and Nancy the amount Social Security figured they had been overcharged. When it was all over, the government actually overpaid them, but decided to let them keep it anyway.

Improper payments are a big problem facing the Social Security Administration. “Since SSA is responsible for issuing timely benefit payments for complex entitlement programs to millions of people, even the slightest error in the overall process can result in millions of dollars in over- or underpayments,” auditors recently concluded.

When the error rate in just one Social Security program dropped by a mere one-tenth of one percent,    $401- million was saved, according to the Office of Management and Budget.  What programs were being scrutinized? Payment of Social Security benefits and the administration of Medicare.

After Bill originally applied for Medicare benefits, he was informed four months later that he had turned down Medicare and wouldn’t be eligible again for another year. After a series of telephone conversations with different representatives, Bill and Nancy were informed the problem was solved.

Then, a private health care provider told Bill that he didn’t qualify for Medicare, because he still wasn’t enrolled. Yes you are, said Medicare, but we lost the paperwork. Could you please fill out a new application?

Then Bill was told that he wasn’t enrolled because the cost of medical insurance exceeded his monthly benefit. He paid almost $1,500 to straighten it out. Despite this, the private health care provider still informed him he wasn’t covered.

Senior regional officials finally admitted their mistakes and immediately sent a letter to the private health care provider acknowledging that both Bill and Nancy were enrolled in Medicare, but then overpaid the refund due to Bill and Nancy. Oh well, they said, keep it anyway.

“It’s only been a couple of months. I hope it’s really fixed,” says Nancy. “I’m waiting for a letter demanding the money back.”