Medicare: Reasonableness of Health Maintenance Organization Payments Not Assured
HRD-89-41
Published: Mar 07, 1989. Publicly Released: Mar 07, 1989.
Skip to Highlights
Highlights
GAO reviewed Medicare health maintenance organizations' (HMO) adjusted community rates (ACR) process, focusing on HMO compliance with the Health Care Financing Administration's (HCFA) rate-setting guidelines and instructions.
Recommendations
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 revise its instructions to HMO on preparing ACR submissions to require the use of a standardized ACR submission. |
Closed – Implemented
HCFA revised its instructions to require standardized ACR submission for 1990 and 1991, and plans to revise regulations to eliminate an option that permits some HMO not to submit standardized ACR. Since 1989, each year HCFA has required HMO to submit ACR in a standardized form. HCFA officials maintain that this will continue in the future, but HCFA has not established a permanent requirement.
|
| Department of Health and Human Services | The Secretary of Health and Human Services should direct the Administrator, HCFA, to establish policies and procedures to periodically conduct on-site reviews of HMO to verify for accuracy and reasonableness the data supporting their ACR against their records and accounting system reports. |
Closed – Implemented
An ACR monitoring protocol was developed by HCFA but does not include on-site reviews.
|
| Department of Health and Human Services | The Secretary of Health and Human Services should direct the Administrator, HCFA, to revise HCFA regulations and incorporate provisions in HMO contracts to require that HMO: (1) certify the accuracy and reasonableness of their ACR submissions; and (2) explicitly authorize HCFA to recoup from HMO any excess payments that can be shown to have resulted from HMO use of data that were not accurate, current, or complete. |
Closed – Implemented
For the 1990 and 1991 contract year, HCFA required HMO to certify the accuracy of their ACR submissions. HCFA plans to make this a permanent requirement. Since 1989, each year HCFA has required HMO to submit ACR in a standardized form. HCFA officials maintain that this will continue in the future, but HCFA has not revised its regulations to make the requirement permanent, as GAO recommended.
|
| Department of Health and Human Services | The Secretary of Health and Human Services should direct the Administrator, HCFA, to revise its instructions to HMO on preparing ACR submissions to require HMO to use both volume and intensity adjustments to calculate utilization factors and adequately document the basis for the factors used. |
Closed – Implemented
HCFA revised its instructions as GAO recommended.
|
| Department of Health and Human Services | The Secretary of Health and Human Services should direct the Administrator, HCFA, to revise its instructions to HMO on preparing ACR submissions to stipulate the conditions under which HMO will be permitted to use cost and utilization data other than their own for computing ACR and establish a requirement that HMO not able to meet such conditions and not having complete data to support their ACR submissions be placed under a corrective action plan as a condition for contract renewal. |
Closed – Implemented
HCFA revised its instructions as GAO recommended.
|
Full Report
Office of Public Affairs
Topics
Contractor paymentsCost analysisHealth insurance cost controlHealth maintenance organizationsMedical services ratesMedicareOverpaymentsStatistical methodsDiagnosis related groupsBeneficiaries