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Medicare: Past Overuse of Intensive Care Services Inflates Hospital Payments

HRD-86-25 Published: Mar 07, 1986. Publicly Released: Mar 07, 1986.
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Highlights

GAO analyzed the changes in intensive care units (ICU) since the implementation of the Medicare prospective payment system (PPS) in order to: (1) estimate the extent to which, prior to PPS, Medicare patients received ICU services when less costly routine care would have been a feasible option; (2) determine whether hospital practices regarding the use of ICU services changed after PPS implementation; and (3) ensure that changes in such utilization are reflected in Medicare payment rates.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Health and Human Services The Secretary of Health and Human Services should revise prospective payment rates to base them on 1984 or later cost data, which reflect hospital behavior under PPS.
Closed – Not Implemented
The Department of Health and Human Services (HHS) has not rebased prospective payment rates. The Prospective Payment Assessment Commission has recommended reductions in rates in 1987, 1988, and 1989, based on its analysis of hospital cost data. The Commission again recommended rebasing in 1990. The hospital industry has also recently supported rebasing.

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Topics

Health Care
Diagnosis related groupsHealth care cost controlHospital care servicesHospitalsMedical services ratesMedicareProgram managementProspective paymentsHealth carePhysicians