Medicare/Medicaid Funds Can Be Better Used To Correct Deficiencies in Indian Health Service Facilities

HRD-83-22: Published: Aug 16, 1983. Publicly Released: Aug 16, 1983.

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GAO reviewed the Indian Health Service's (IHS) management of funds collected from Medicare and Medicaid programs for services provided in its facilities to Indians eligible for those programs. IHS is required by law to use the funds collected to make improvements in its facilities to enable them to meet and remain in compliance with Medicare/Medicaid standards.

In 1976, only half of IHS hospitals met the Medicare/Medicaid standards. IHS began applying its Medicare/Medicaid funds toward the objective of bringing all of its facilities into compliance with the standards and, by October 1981, the objective was achieved. IHS now spends the funds primarily on recurring costs needed to maintain compliance. However, IHS has established a practice that results in the allocation of available Medicare/Medicaid collections to the facility that provided the services rather than redirecting them to the most needy facilities. This practice has not ensured that the facilities most in need of funds receive them and has resulted in the accumulation of a large unobligated balance of Medicare/Medicaid collections. GAO also found that the IHS Medicare/Medicaid billing and collection system is much more costly than those of private hospitals because: (1) IHS is not able to take advantage of the economies afforded by volume billing; and (2) the involvement of multiple IHS organizational levels in the primarily manual system is cumbersome and results in additional work through the maintenance of duplicate records.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The Department of Health and Human Services (HHS) disagreed with this recommendation for reasons already addressed in the report. Therefore, GAO believes that action should be taken to implement this recommendation.

    Recommendation: The Secretary of Health and Human Services should direct the Assistant Secretary for Health to revise IHS procedures to allow unobligated Medicare/Medicaid collections to be distributed to IHS facilities with unmet needs.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Implemented

    Comments: Implementation of the computerized system was completed during 1992.

    Recommendation: The Secretary of Health and Human Services should direct the Assistant Secretary for Health to increase the efficiency of the IHS Medicare/Medicaid billing and collection system by such means as eliminating duplicative functions among the various IHS organizational levels and increasing automation of the system where justifiable by cost savings.

    Agency Affected: Department of Health and Human Services

 

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