Cost Cutting Measures Possible if Public Health Service Hospital System Is Continued

HRD-81-62: Published: Jun 10, 1981. Publicly Released: Jun 10, 1981.

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GAO reviewed the Public Health Service (PHS) policies and procedures for: (1) determining the eligibility of seamen for free health care as PHS beneficiaries; (2) obtaining reimbursement for care provided to beneficiaries for injuries due to negligence of third parties and for care provided in community facilities to individuals who are not beneficiaries; and (3) managing a program under which PHS contracts with private health care providers. After the completion of the GAO review, the President proposed that Congress discontinue the PHS hospital system to provide care for sick and disabled seamen. Prompt enactment of the President's proposal would eliminate the need for the changes to the hospital system which are recommended in this report.

Individuals claiming to be seamen and seeking health care as PHS beneficiaries must present evidence of eligibility, but GAO noted that PHS hospital and clinic staffs did not require all persons to furnish documented evidence of eligibility, were lenient in reviewing evidence submitted, and rarely verified the accuracy of evidence given. As a result, some patients who were not eligible beneficiaries were provided health care. PHS officials said that training of hospital admissions personnel is needed to correct this management weakness. No practical means exists to verify the accuracy of documented evidence of seamen eligibility based on the current eligibility criteria. The Medical Care Recovery Act established the Government's right to recover costs of medical care provided to persons as a result of negligence of third parties. Hospitals generally were not attempting to identify patients who were treated in PHS facilities or by private health providers for injuries incurred under tort conditions. Little collection action was taken on cases referred for collection. On many of these cases, the statute of limitations has expired. The Government could also recover millions of dollars for health care provided for patients who have some form of health insurance. Hospitals were providing free care to community residents who were not entitled to free care but were expected to reimburse the hospitals based on their ability to pay. PHS has little control over the volume, cost, or quality of services provided under the contract care program.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should amend the Federal Medical Care Recovery Act to authorize recovery of health care costs from third-party resources when providing care under circumstances not involving tort claims.

Recommendations for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Health and Human Services should direct the Public Health Service (PHS) to comply with established procedures for reviewing data submitted by individuals claiming to be seamen and seeking health care form PHS. If PHS hospitals and clinics lack trained admissions staff, PHS should be directed to provide such training.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Health and Human Services should direct the Public Health Service (PHS) to designate a unit in each hospital specifically for obtaining third-party resource data form all patients treated by or at the expense of PHS.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Health and Human Services should require the Public Health Service to develop criteria for the location, number, selection, and payment of contract providers.

    Agency Affected: Department of Health and Human Services

  4. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Health and Human Services should require the Public Health Service (PHS) to establish controls over hospital admissions and consultations that contract physicians order at PHS expense.

    Agency Affected: Department of Health and Human Services

  5. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Health and Human Services should require the Public Health Service to implement an improved information system to assist program managers in managing the contract health care program.

    Agency Affected: Department of Health and Human Services

  6. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Health and Human Services should require the Public Health Service to monitor contract physician practices through regular site visits and medical audits and terminate contracts with providers who abuse the program.

    Agency Affected: Department of Health and Human Services

  7. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Health and Human Services should direct the Public Health Service (PHS) to designate a unit in each hospital specifically responsible for verifying ability to pay and obtaining payment from persons treated at PHS facilities but not entitled to free care as PHS beneficiaries.

    Agency Affected: Department of Health and Human Services

  8. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Health and Human Services should direct the Public Health Service to designate a unit in each hospital specifically responsible for referring all cases in which care is provided to beneficiaries for injuries incurred under tort conditions to regional attorneys for collection under the terms of the Federal Medical Care Recovery Act.

    Agency Affected: Department of Health and Human Services

  9. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Health and Human Services should require the Public Health Service (PHS) to require the hospitals to effectively monitor and transfer PHS beneficiaries from private hospitals to PHS facilities when medically feasible.

    Agency Affected: Department of Health and Human Services

 

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