Medicare:

Millions Can Be Saved by Screening Claims for Overused Services

HEHS-96-49: Published: Jan 30, 1996. Publicly Released: Feb 9, 1996.

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GAO provided information on Medicare payments for unnecessary medical services, focusing on the: (1) extent to which Medicare contractors employ medical necessity prepayment screens for procedures that are likely to be overused; (2) potential impact of autoadjudicated prepayment screens on Medicare spending; and (3) federal government's role in reducing overused medical procedures billed to Medicare.

GAO found that: (1) Medicare spending for unnecessary medical services is widespread; (2) more than half of the 17 contractors surveyed do not use prepayment screens to check whether claimed services are necessary; (3) seven of the contractors paid between $29 and $150 million for unnecessary medical services; (4) many Medicare claims are paid because contractors' criteria for identifying unnecessary medical services vary; and (5) the Health Care Financing Administration (HCFA) needs to take a more active role in promoting local medical policies and prepayment screens for overused medical procedures.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Although HCFA has taken some action to prevent Medicare payments for unnecessary services, there is not a coordinated approach to identifying procedures that are overused nationally.

    Recommendation: To help prevent Medicare payments for unnecessary services, the Secretary of Health and Human Services should direct the Administrator, HCFA, to systematically analyze national Medicare claims data and use analyses conducted by HHS Office of the Inspector General and Medicare contractors to identify medical procedures that are subject to overuse nationwide.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Implemented

    Comments: On September 19, 1997, HCFA reported that it had completed many model medical policies, including policies for procedures identified in the report, but it is re-examining whether to continue with the model medical policy approach. In addition, HCFA has no plans to establish a database of all prepayment screens that can be analyzed and shared with all contractors.

    Recommendation: To help prevent Medicare payments for unnecessary services, the Secretary of Health and Human Services should direct the Administrator, HCFA, to gather information on all contractors' local medical policies and prepayment screens for widely overused procedures, evaluate their cost and effectiveness, and disseminate information on model policies and effective prepayment screens to all the contractors.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed - Implemented

    Comments: HCFA reported that it has required contractors to review claims for evaluation and management visits based on findings from an HHS OIG study. However, HCFA has no plans to hold contractors accountable in general for taking corrective action to control payments for widely overused procedures because the agency has not yet developed a systematic approach for identifying national payment problems. Until then, carriers have discretion over what policies and screens to implement using the focused medical review process.

    Recommendation: To help prevent Medicare payments for unnecessary services, the Secretary of Health and Human Services should direct the Administrator, HCFA, to hold the contractors accountable for implementing local policies, prepayment screens (including autoadjudicated screens), or other corrective actions to control payments for procedures that are highly overused nationwide.

    Agency Affected: Department of Health and Human Services

 

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