WASHINGTON (AP) - Medicare lost an estimated $11.9 billion to waste, fraud and mistakes last year, half of what was lost five years ago from improper payments to doctors and hospitals, government auditors said Tuesday.

Health and Human Services Secretary Tommy Thompson praised efforts to reduce the improper payments, which could range from innocent mistakes to outright fraud and abuse. But he promised a closer look at the federal health insurance program's bookkeeping and computer systems.

``We owe the American people reliable financial data just as major corporations in the private sector owe a sound accounting to their shareholders,'' he said.

An audit released Tuesday by the Health and Human Services Department's inspector general estimates that Medicare made $11.9 billion in improper payments in the government's fiscal year 2000, which ended last Sept. 30.

The improper payments - money Medicare paid but shouldn't have - represent nearly 7 cents of every dollar Medicare pays directly to health care providers, such as doctors and hospitals, said the HHS Office of Inspector General, the agency's watchdog.

By comparison, in 1996 - the first year such estimates were made - improper Medicare payments were estimated at $23.2 billion, or 14 cents of every dollar paid.

The auditors, however, did not immediately attempt to distinguish between attempts to defraud the government and simple errors. The most common problem found - accounting for $5.1 billion in improper payments - was that services provided were not considered medically necessary.

In one example, a doctor was paid $3,305 for 40 hypnotherapy sessions with an Alzheimer's patient, although auditors found the 95-year-old patient was not able to focus or cooperate - a requirement for the treatment to have been deemed medically necessary.

Acting HHS Inspector General Michael F. Mangano attributed the improvements to long-range of efforts in recent years - including efforts by the Health Care Financing Administration, which is an arm of HHS, to help doctors, hospitals and other health care providers learn how to properly file and document claims.

``These combined efforts have made a significant impact,'' he said, adding that some providers still have trouble providing Medicare with the right documents and billing only for services that are medically necessary.

Such troubles continued to worry Congress, which is expected to debate significant changes to Medicare this year.

``Every dollar wasted is a dollar that doesn't help a patient,'' said Sen. Charles Grassley, R-Iowa, chairman of the Senate Finance Committee, which writes Medicare law. ``We could pay for a lot of prescription drugs for older Americans with $11.9 billion.''

Grassley said he's asking the HHS watchdog to investigate improper Medicare payments made on behalf of services to prison inmates, patients who turned out to be dead at the time health care was supposedly given, and recipients who were deported.

In Tuesday's report, the watchdog praised its own work with the Justice Department in tracking down intended errors and fraud.

A report made in January documented some fraud in the Medicare program, which serves 39 million elderly and disabled Americans.

In fiscal 2000, the government collected $717 million in judgments, settlements or administrative penalties in health care fraud cases and proceedings. Of that amount, $577 million was returned to the Medicare trust fund, said the January report issued by the Health and Human Services and Justice departments.

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