Medicare:

Statutory Modifications Needed for the Peer Review Program Monetary Penalty

HRD-89-18: Published: Mar 30, 1989. Publicly Released: Mar 30, 1989.

Additional Materials:

Contact:

Sarah F. Jaggar
(202) 512-7119
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

GAO reviewed the Department of Health and Human Services' (HHS) Office of the Inspector General's (OIG) actions on monetary penalties recommended by peer review organizations (PRO) against hospitals and physicians for improper or unnecessary health care services to Medicare beneficiaries.

GAO found that OIG: (1) revised its policy partially to meet a statutory provision limiting monetary fines to the cost of the unnecessary or poor-quality care; (2) established a new policy in 1987, requiring penalty calculations based on cost-effectiveness; (3) seldom imposed monetary penalties against hospitals or physicians after it changed its policy; (4) approved only 3 of 24 PRO monetary penalty recommendations, but agreed that in 15 instances, the physician or hospital violated their obligations; (5) rejected recommendations because it determined that the penalties were not cost-effective; (6) policy to accept only violation cases meeting its criteria did not ensure sanction consistency; and (7) has not modified its cost-effectiveness policy approach for determining monetary penalties. GAO also found that since the OIG policy became effective, PRO: (1) have significantly reduced monetary penalty recommendations and halted action on some cases that warranted sanctions; and (2) have submitted only 4 monetary penalty recommendations over a 15-month period, compared with 35 in the previous such period.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: The HHS Inspector General has made a similar recommendation. HHS also supports the recommendation and included it as part of its annual legislative proposals. Bills have been introduced in the House and Senate that would implement the recommendation. No action has resulted.

    Matter: The Senate Committee on Finance, the House Committee on Energy and Commerce, and the House Committee on Ways and Means should develop legislation amending section 1156 of the Social Security Act to set a fixed upper limit on the size of monetary penalties in lieu of the current cost-based limit.

  2. Status: Closed - Not Implemented

    Comments: The HHS Inspector General has made a similar recommendation. HHS also supports the recommendation and included it as part of its annual legislative proposals. Bills have been introduced in the House and Senate that would implement the recommendation. No action has resulted.

    Matter: The Senate Committee on Finance, the House Committee on Energy and Commerce, and the House Committee on Ways and Means should develop legislation amending section 1156 of the Social Security Act to set a fixed upper limit on the size of monetary penalties in lieu of the current cost-based limit.

  3. Status: Closed - Not Implemented

    Comments: The HHS Inspector General has made a similar recommendation. HHS also supports the recommendation and included it as part of its annual legislative proposals. Bills have been introduced in the House and Senate that would implement the recommendation. Congress, however, has not acted.

    Matter: The Senate Committee on Finance, the House Committee on Energy and Commerce, and the House Committee on Ways and Means should develop legislation amending section 1156 of the Social Security Act to set a fixed upper limit on the size of monetary penalties in lieu of the current cost-based limit.

 

Explore the full database of GAO's Open Recommendations »

Sep 15, 2016

Sep 14, 2016

Sep 12, 2016

Sep 9, 2016

Sep 6, 2016

Aug 31, 2016

Looking for more? Browse all our products here