Medicare:

Inadequate Review of Claims Payments Limits Ability to Control Spending

HEHS-94-42: Published: Apr 28, 1994. Publicly Released: Jun 8, 1994.

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GAO reviewed the adequacy of Medicare contractors' postpayment review activities, focusing on: (1) whether the Health Care Financing Administration (HCFA) is identifying providers that are inappropriately billing the Medicare program; and (2) why Medicare spends so much for certain medical services.

GAO found that: (1) HCFA does not monitor Medicare carriers' postpayment analyses and often misses opportunities to identify millions of dollars in excessive payments; (2) Medicare carriers use claims data to identify billing abuses and excessive payments for health care services; (3) Medicare carriers use inaccurate data in compiling statistical reports on physicians and other providers; (4) HCFA has failed to provide carriers with appropriate analysis methods and outcome measures and cannot ensure that the carriers are systematically targeting providers that warrant investigation; (5) procedural and legal constraints hinder carrier efforts to act against abusive providers; (6) HCFA lacks the data needed to measure carriers' postpayment review performance; (7) HCFA does not assess the extent that carriers' recovery efforts and payment controls save program costs or deter future abuses; (8) funds allotted for postpayment review have not kept pace with the growth in Medicare claims; and (9) HCFA needs to expand guidance and technical assistance for carriers' data analysis methods and establish relevant measures to assess carriers' postpayment review performance.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: HCFA has increased its guidance to contractors, which is more explicit about the data and analysis methods contractors are required to use to identify potential claims payment problems.

    Recommendation: To strengthen carriers' ability to identify and address Medicare losses to waste and abuse, the Secretary of Health and Human Services should direct the Administrator, HCFA, to provide carriers guidance and technical assistance to improve profiling and focused medical reviews.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Implemented

    Comments: After identifying legal loopholes and other constraints hindering carriers' audit and recovery efforts, HCFA's recommendations were incorporated into the Administration's fraud and abuse legislative proposal. This legislation was presented in early 1997 and many of its provisions were enacted in the Balanced Budget Act of 1997.

    Recommendation: To strengthen carriers' ability to identify and address Medicare losses to waste and abuse, the Secretary of Health and Human Services should direct the Administrator, HCFA, to identify legal issues that constrain carriers' audit and recovery efforts and make recommendations to Congress to eliminate such constraints.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed - Implemented

    Comments: HCFA will be placing a new instruction pertaining to projection of audit sampling results for collection of overpayments into its Program Integrity Manual by the end of CY 2000. It will be similar to the new instruction covering part A overpayment audits.

    Recommendation: To strengthen carriers' ability to identify and address Medicare losses to waste and abuse, the Secretary of Health and Human Services should direct the Administrator, HCFA, to amend Medicare procedures, such as those involving the projection of sample results, to enhance carriers' audit and recovery efforts.

    Agency Affected: Department of Health and Human Services

  4. Status: Closed - Implemented

    Comments: HCFA has solicited suggestions from GAO and OIG for enhancing the Contractor Performance Evaluation Program, and has incorporated several of these suggestions into the fiscal year 1995 requirements.

    Recommendation: To strengthen carriers' ability to identify and address Medicare losses to waste and abuse, the Secretary of Health and Human Services should direct the Administrator, HCFA, to revise Contractor Performance Evaluation Program evaluation criteria to include outcome measures that better assess carriers' postpayment review performance.

    Agency Affected: Department of Health and Human Services

 

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