Proposal To Improve Identification and Collection of Medicare Part B Duplicate Payments

HRD-84-88: Published: Aug 17, 1984. Publicly Released: Aug 17, 1984.

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GAO reviewed the operations of selected Medicare claims processing contractors to determine whether it would be cost beneficial for the carriers to periodically screen their claims on a postpayment basis to recover duplicate payments.

GAO found that screening paid claims to identify duplicate payments could be cost beneficial. For two of the contractors, GAO identified an estimated $184,700 in duplicate payments on which it believed the carriers should follow up. The carriers estimated that their costs to investigate and take the necessary recovery steps would be about $77,800. Prior work showed that carriers' programs to identify or recover overpayments for medically unnecessary services on an after-the-fact or postpayment basis had not been cost beneficial at six of nine carriers reviewed and had about broken even at the other three. Although GAO has supported the postpayment utilization review function because of the deterrent effect on program abuse and other nonquantifiable benefits, GAO believes that a postpayment duplicate payment detection effort offers opportunities for substantially more favorable cost benefit results than the carriers' postpayment utilization review activities. Detecting and denying duplicate claims before payment is far better than identifying and attempting to recover an erroneous payment. GAO believes that, in the long run, the most important benefit of screening paid claims may be that carriers will be better able to identify and correct the billing or processing problems that allowed the duplicate payments to be made. If so, duplicate payments may be reduced to the point that screening paid claims will not be worthwhile.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Maryland Blue Shield collected an unknown amount on 36 claims. Additional collection action was not taken because HCFA stated that $5 saved for every $1 spent on collection efforts would not be achieved. The 5-to-1 ratio is the HCFA established level for cost saving initiatives.

    Recommendation: The Administrator of the Health Care Financing Administration (HCFA) should require Maryland Blue Shield to follow up on the 6,130 potential duplicates GAO identified.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  2. Status: Closed - Implemented

    Comments: HCFA has narrowly defined cost-effective screens as those which produce 5-to-1 ratios of savings over costs. Because of this, GAO believes that opportunities are being missed by not allowing screens with positive but lower savings-to-cost ratios.

    Recommendation: The Administrator, HCFA, should require carriers to screen their paid claims computer records at least once a year and to recover the duplicate payments they identify.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  3. Status: Closed - Not Implemented

    Comments: Because HCFA narrowly defined what constitutes a cost-effective screen, the carrier program was determined as ineffective. Therefore, HCFA has elected not to perform the monitoring GAO recommended.

    Recommendation: The Administrator, HCFA, should monitor the results achieved by the carriers so that the screening criteria: (1) can be modified as necessary; and (2) can be discontinued for any carriers that reduce their duplicate payments enough that screening paid claims is no longer cost beneficial.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

 

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