Medicare Claims:

HCFA Proposal To Establish an Administrative Law Judge Unit

HRD-88-84BR: Published: Apr 20, 1988. Publicly Released: Apr 20, 1988.

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Pursuant to a legislative requirement, GAO reviewed the Health Care Financing Administration's (HCFA) proposed plan to establish its own hearings and appeals unit to handle Medicare hearings, at an estimated cost of $15 million.

GAO found that, under the proposed plan, HCFA: (1) would use 42 administrative law judges (ALJ) compared to the 666 the Social Security Administration (SSA) currently uses; (2) would hear an estimated 24,000 Medicare cases each year; (3) believes it can provide faster and less expensive hearings and estimates that it will complete each case within 60 days at an average cost of about $420; (4) anticipates paying ALJ at a GS-14 level; (5) would centralize its operations to improve case-load management and promote consistency in the application of federal laws and regulations; and (6) hopes to use telephone hearings in 50 percent of the cases. GAO also found that HCFA has: (1) not tested its approach and lacks empirical evidence to support its key assumptions; (2) little documentation for its proposal; and (3) no experience to ensure that the program will work as planned.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Congress did not fund the HCFA proposal.

    Matter: Congress should require HCFA to test and evaluate the proposal to establish its own hearings and appeals unit separate from that of SSA before implementation. The issues that should be examined in a test include such factors as the: (1) mix of claimants appealing both part A and part B cases; (2) actual telephone acceptance rate of this proposal; (3) possible variations by type of claimant (for example, beneficiaries, physicians); (4) resulting time, case load, and cost of hearings; and (5) performance of the hearings in meeting due process requirements.


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