Medicare: Existing Contract Authority Can Provide for Effective Program Administration
HRD-86-48
Published: Apr 22, 1986. Publicly Released: Apr 22, 1986.
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Highlights
GAO evaluated the Health Care Financing Administration's (HCFA) management of Medicare claims processing under noncompetitive cost reimbursement contracts and eight competitively bid fixed-price contracts to determine whether: (1) the advantages of fixed-price competition justify broader use of this method of contracting; and (2) the Department of Health and Human Services' (HHS) current authority is sufficient to achieve increased administrative efficiency without a change in contracting methods.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| DEFRA authority, allowing HHS to use a limited number of fixed-price competitions annually to remove poorly performing contractors, expires at the end of fiscal year 1986. Congress should consider extending this authority or making it permanent. |
Closed – Implemented
|
The Omnibus Budget Reconciliation Act included a provision extending the authority for 3 years. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Health and Human Services | The Secretary of Health and Human Services should direct the Administrator, HCFA, to use a Medicare contractor budget development process that places more emphasis on the individual circumstances of contractors than the formula-based cost caps. The process should consider the input of the Medicare contractors in order to more realistically determine the funds needed to sufficiently support program safeguards, and ensure an adequate level of beneficiary and provider service activities. |
Closed – Not Implemented
HHS disagreed with this recommendation and plans no action.
|
| Department of Health and Human Services | The Secretary of Health and Human Services should direct the Administrator, HCFA, to increase contractor incentives for saving program benefit dollars above the minimum performance standards during future revisions of the Contractor Performance Evaluation Program. |
Closed – Not Implemented
In commenting on the report, HHS agreed with this recommendation and indicated that action would be taken. HHS analyzed cost/benefit ratios of carrier prepayment edits, but decided not to establish specific performance standards.
|
| Department of Health and Human Services | The Secretary of Health and Human Services should direct the Administrator, HCFA, to use existing legislative authorities to remove consistently poor performing contractors from the Medicare program. |
Closed – Implemented
In commenting on the report, HHS agreed with this recommendation and stated that multiyear performance measures would be used to identify consistently poor performing contractors, and that it would take appropriate action, including termination.
|
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Topics
Budget cutsBudget deficitMedicareClaims processingContract administrationContract performanceCost controlDeficit reductionFixed price contractsAdministrative costs