B-196776.OM, JAN 31, 1980

B-196776.OM: Jan 31, 1980

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EXCEPT THAT NO SUCH PAYMENTS SHALL BE MADE TO ANY PROVIDER UNLESS IT HAS FURNISHED SUCH INFORMATION AS THE SECRETARY MAY REQUEST IN ORDER TO DETERMINE THE AMOUNTS DUE SUCH PROVIDER UNDER THIS PART FOR THE PERIOD WITH RESPECT TO WHICH THE AMOUNTS ARE BEING PAID OR ANY PRIOR PERIOD.". THIS PROVISION MERELY PROVIDES THAT PAYMENTS ARE TO BE MADE PRIOR TO GAO AUDITS OR SETTLEMENT OF THE FEDERAL HOSPITAL INSURANCE TRUST FUND. THE APPARENT PURPOSE OF THIS SUBSECTION IS TO PERMIT TIMELY. SINCE YOUR PRIMARY CONCERN IS WITH THE AUTHORITY AND RESPONSIBILITY OF GAO TO QUESTION THE REASONABLENESS OF PAYMENTS TO MEDICARE PROVIDERS. YOU SHOULD BE AWARE THAT OTHER PROVISIONS PROHIBIT THIS OFFICE FROM QUESTIONING DETERMINATIONS BY THE SECRETARY OF HEW THAT PAYMENTS TO MEDICARE PROVIDERS ARE REASONABLE.

B-196776.OM, JAN 31, 1980

SUBJECT: INTERPRETATION OF 42 U.S.C. SEC. 1395GA) - B-196776 - O.M.:

DIRECTOR, GGD:

GROUP DIRECTOR DANIEL C. HARRIS OF YOUR DIVISION HAS ASKED FOR AN INTERPRETATION OF 42 U.S.C. SEC. 1395GA) (1976) WHICH REFERS TO THE AUDIT OR SETTLEMENT BY GAO OF PAYMENTS TO MEDICARE PROVIDERS. HE ALSO HAS ASKED WHETHER, UNDER THIS SECTION, GAO HAS RESPONSIBILITY OR AUTHORITY TO REVIEW THE REASONABLENESS OF MEDICARE PAYMENTS TO MEDICARE PROVIDERS.

THIS SUBSECTION PROVIDES:

"(A) THE SECRETARY SHALL PERIODICALLY DETERMINE THE AMOUNT WHICH SHOULD BE PAID UNDER THIS PART TO EACH PROVIDER OF SERVICES WITH RESPECT TO THE SERVICES FURNISHED BY IT, AND THE PROVIDER OF SERVICES SHALL BE PAID, AT SUCH TIME OR TIMES AS THE SECRETARY BELIEVES APPROPRIATE (BUT NOT LESS OFTEN THAN MONTHLY) AND PRIOR TO AUDIT OR SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE, FROM THE FEDERAL HOSPITAL INSURANCE TRUST FUND, THE AMOUNTS SO DETERMINED, WITH NECESSARY ADJUSTMENTS ON ACCOUNT OF PREVIOUSLY MADE OVERPAYMENTS OR UNDERPAYMENTS; EXCEPT THAT NO SUCH PAYMENTS SHALL BE MADE TO ANY PROVIDER UNLESS IT HAS FURNISHED SUCH INFORMATION AS THE SECRETARY MAY REQUEST IN ORDER TO DETERMINE THE AMOUNTS DUE SUCH PROVIDER UNDER THIS PART FOR THE PERIOD WITH RESPECT TO WHICH THE AMOUNTS ARE BEING PAID OR ANY PRIOR PERIOD."

READ LITERALLY, 42 U.S.C. SEC. 1395GA) (1976) PROVIDES NO DIRECT AUTHORITY FOR GAO TO CONDUCT AUDITS NOR DOES IT DESCRIBE THE NATURE OR EFFECT OF ANY SUCH AUDITS. THIS PROVISION MERELY PROVIDES THAT PAYMENTS ARE TO BE MADE PRIOR TO GAO AUDITS OR SETTLEMENT OF THE FEDERAL HOSPITAL INSURANCE TRUST FUND. THE APPARENT PURPOSE OF THIS SUBSECTION IS TO PERMIT TIMELY, PERIODIC PAYMENTS TO PROVIDERS PRIOR TO FINAL ADJUSTMENTS OF THE AMOUNTS DUE.

SINCE YOUR PRIMARY CONCERN IS WITH THE AUTHORITY AND RESPONSIBILITY OF GAO TO QUESTION THE REASONABLENESS OF PAYMENTS TO MEDICARE PROVIDERS, YOU SHOULD BE AWARE THAT OTHER PROVISIONS PROHIBIT THIS OFFICE FROM QUESTIONING DETERMINATIONS BY THE SECRETARY OF HEW THAT PAYMENTS TO MEDICARE PROVIDERS ARE REASONABLE. UNDER 42 U.S.C. SEC. 1395II, MEDICARE "REASONABLE COST" DECISIONS ARE SUBJECT TO THE FINAL DETERMINATION PROVISIONS OF 42 U.S.C. SEC. 405(H) (1976):

"(H) FINALITY OF SECRETARY'S DECISION

"THE FINDINGS AND DECISIONS OF THE SECRETARY AFTER A HEARING SHALL BE BINDING UPON ALL INDIVIDUALS WHO WERE PARTIES TO SUCH HEARING. FINDINGS OF FACT OR DECISION OF THE SECRETARY SHALL BE REVIEWED BY ANY PERSON, TRIBUNAL, OR GOVERNMENTAL AGENCY EXCEPT AS HEREIN PROVIDED. ACTION AGAINST THE UNITED STATES, THE SECRETARY, OR ANY OFFICER OR EMPLOYEE THEREOF SHALL BE BROUGHT UNDER SECTIONS 1331 OR 1346 OF TITLE 28 TO RECOVER ON ANY CLAIM ARISING UNDER THIS SUBCHAPTER."

WE INTERPRETED THIS SECTION IN B-164031(3).125, NOVEMBER 7, 1977 (COPY ATTACHED) AND WE CONCLUDED THAT GAO IS PRECLUDED BY THIS PROVISION FROM REVIEWING THE SECRETARY OF HEW'S "REASONABLE COST DETERMINATIONS" IN THE MEDICARE PROGRAM. THEREFORE, IN ANSWER TO YOUR QUESTION, GAO HAS NO AUTHORITY OR RESPONSIBILITY TO DETERMINE THE REASONABLENESS OF MEDICARE PAYMENTS TO MEDICARE PROVIDERS.

WE WOULD LIKE TO POINT OUT THAT THIS PROHIBITION ONLY APPLIES TO OUR QUESTIONING OF SPECIFIC CLAIM DETERMINATIONS. WE ARE NOT PROHIBITED FROM AUDITING THE MEDICARE PROGRAM, INCLUDING REASONABLE COST PAYMENTS, UNDER OUR GENERAL AUDIT AUTHORITY. SEE 31 U.S.C. SECS. 53 AND 1154 (1976). THESE AUDITS CANNOT AFFECT THE FINALITY OF THE SECRETARY'S DETERMINATIONS ON INDIVIDUAL MEDICARE CLAIMS, ALTHOUGH THEY MAY RAISE QUESTIONS CONCERNING THE METHODOLOGY USED AND THE OVERALL ACCURACY OF THE SECRETARY'S DETERMINATIONS.