Internal Controls: Need to Strengthen Controls Over Payments by Medicare Intermediaries
HRD-89-8
Published: Nov 14, 1988. Publicly Released: Nov 14, 1988.
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Highlights
GAO reviewed the Health Care Financing Administration's (HCFA) internal controls over Medicare payments for health care services to determine whether HCFA ensured that: (1) patients were eligible for Medicare benefits; (2) claimed services were provided, covered by Medicare, necessary, and of good quality; and (3) payments were reasonable and correct.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Health and Human Services | To better ensure the correction of errors detected through HCFA master record file edits, the Secretary of Health and Human Services (HHS) should require the Administrator, HCFA, to: (1) include all errors detected by master record computer edits in its unresolved claims, or returned-to-intermediary file (RTI), until intermediaries confirm that they have been fully resolved; (2) add requirements to the Contractor Performance Evaluation Program (CPEP) that will ensure that intermediaries resolve those types of errors that raise significant payment questions and correct systems weaknesses that allow the errors to occur; and (3) revise CPEP to ensure followup on actions by intermediaries to resolve errors purged from RTI in early 1988, especially those that raise significant payment questions. |
Closed – Implemented
The HHS Office of Inspector General performed a study of Medicare overpayments, underpayments, and duplicate cases and concluded that the number of cases and dollar amounts did not warrant the actions that GAO recommended. HCFA has, however, implemented tighter controls in its CPEP program.
|
| Department of Health and Human Services | The Secretary of Health and Human Services should require the Administrator, HCFA, to evaluate the adequacy and timeliness of corrective actions taken by carriers in resolving errors detected by master record edits. |
Closed – Implemented
HHS agreed with this recommendation and issued a regional office memorandum to implement it.
|
| Department of Health and Human Services | The Secretary of Health and Human Services should include in his fiscal year (FY) 1988 FMFIA report to the President and Congress a discussion of the: (1) material weaknesses in internal controls involving inadequacies in correcting Medicare payment errors identified by HCFA master record edits; and (2) actions planned or taken to correct such weaknesses. |
Closed – Implemented
HCFA has reviewed the cases in the GAO sample and disagreed with the GAO conclusion.
|
| Department of Health and Human Services | To have greater assurance that PRO are performing effective medical reviews, the Secretary of Health and Human Services should require the Administrator, HCFA, to: (1) develop guidelines on the relative roles and responsibilities of the SuperPRO contractor, HCFA regional offices, and PRO in determining why differences between the SuperPRO contractor and PRO review decisions are occurring; (2) identify actions that PRO should take to reduce the differences; and (3) track PRO corrective actions to ensure that the differences are reduced to appropriate levels. |
Closed – Implemented
The HCFA audit site is currently reviewing Medicare overpayment recoveries and is including this issue in its review.
|
| Department of Health and Human Services | To have greater assurance that PRO are performing effective medical reviews, the Secretary of Health and Human Services should require the Administrator, HCFA, to: (1) reevaluate the relative roles of the medical staff of the SuperPRO contractor and HCFA regional offices; (2) eliminate from the PRO Monitoring Protocol and Tracking System (PROMPTS) instructions the requirement that regional office medical review staff conduct routine case evaluations in those areas covered by the SuperPRO contractor; and (3) use the SuperPRO contractor's results as a primary basis for monitoring the quality of PRO medical reviews. |
Closed – Implemented
The HCFA audit site is currently reviewing Medicare overpayment recoveries and is including this issue in its review.
|
| Department of Health and Human Services | To better ensure that provider payments adequately reflect appropriate medical determinations, the Secretary of Health and Human Services should require the Administrator, HCFA, to: (1) encourage PRO to direct payment adjustments, where appropriate, in cases where erroneous review decisions are disclosed by SuperPRO or other evaluators; and (2) incorporate into PROMPTS a requirement for regional offices to assess PRO performances in changing review decisions that subsequent evaluations show were erroneous. |
Closed – Not Implemented
HHS believes that current contractual agreements and PROMPTS requirements are sufficient and that additional action is not necessary.
|
| Department of Health and Human Services | The Secretary of Health and Human Services, in his FY 1988 FMFIA report to the President and Congress, should include a discussion of the material internal control weakness ineffective use of the SuperPRO contractor review results to identify and correct systemic problems in PRO medical review determinations, and planned corrective action. |
Closed – Not Implemented
HHS does not believe that this weakness fits the OMB criteria for being a material weakness and, therefore, is not reporting it as such in the Secretary's FMFIA report.
|
| Department of Health and Human Services | The Secretary of Health and Human Services should direct the Administrator, HCFA, to require intermediaries to report on the results of edits used for detecting unnecessary medical services and implement those edits demonstrated to be effective. |
Closed – Implemented
HCFA now evaluates the effectiveness of edits used by intermediaries and disseminates information to other intermediaries on those edits that appear to be most effective.
|
| Department of Health and Human Services | The Secretary of Health and Human Services should direct the Administrator, HCFA, to require: (1) PRO to report their case review decisions to the SuperPRO contractor concurrently with their universe of cases reviewed; and (2) the SuperPRO contractor to use this information in comparing its review findings to those of PRO. |
Closed – Not Implemented
HCFA questions the need for the action GAO is recommending. It believes that the differences between PRO and SuperPRO decisions are not significant and, therefore, the procedures recommended do not warrant implementation.
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| Department of Health and Human Services | The Secretary of Health and Human Services, in his FY 1988 FMFIA report to the President and Congress, should consider including as internal control weaknesses the lack of a HCFA mechanism for assessing medical need edits used by intermediaries to identify the most effective edits for all intermediaries, controls to ensure the integrity of data submitted for SuperPRO evaluation, and reporting the planned corrective actions on these weaknesses. |
Closed – Not Implemented
HHS has determined that the weakness is nonmaterial.
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Topics
Accounting proceduresClaims processingEligibility determinationsErroneous paymentsHealth care costsInternal controlsMedicareQuality controlReporting requirementsData errors