Medicare:

Information Needed to Assess Payments to Providers

HRD-91-113: Published: Aug 8, 1991. Publicly Released: Aug 8, 1991.

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GAO reviewed Medicare tentative settlements of institutional providers' claims to determine: (1) whether such settlements resulted in excessive overpayments; and (2) the results of those excessive overpayments.

GAO found that: (1) the Health Care Financing Administration's (HCFA) hospital cost report information system (HCRIS) data for fiscal years (FY) 1985 to 1987 show that final cost audits identified net hospital excessive payments totalling about $4 billion; (2) lack of adequate data makes it difficult to determine the effect of excessive tentative settlements on the Medicare trust fund; (3) between FY 1987 and 1990, HCRIS data on over 21,000 final settlements to Medicare hospitals showed that only 25 percent of the tentative settlements were recorded; (4) intermediaries failed to record tentative settlement information in HCRIS and system tracking for audit and reimbursement (STAR) databases; and (5) incomplete and inaccurate HCFA information systems limit the knowledge available on excessive tentative settlements and associated interest costs.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: HCFA instructed intermediaries via program memorandum that recording tentative settlement information in the STAR system was now mandatory.

    Recommendation: To improve the completeness and accuracy of Medicare information databases, the Administrator, HCFA, should instruct intermediaries to record data on all tentative settlements in STAR.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  2. Status: Closed - Implemented

    Comments: HCFA believes that if data is recorded in the STAR system, it should be sufficient to be a requirement to report in HCRIS. However, this change will make it more difficult to use a centralized system to monitor tentative settlements.

    Recommendation: To improve the completeness and accuracy of Medicare information databases, the Administrator, HCFA, should reemphasize to intermediaries the requirement to record tentative settlement data accurately and promptly in HCRIS.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  3. Status: Closed - Implemented

    Comments: HCFA agreed to improve monitoring of both HCRIS and STAR.

    Recommendation: To improve the completeness and accuracy of Medicare information databases, the Administrator, HCFA, should improve monitoring of HCRIS and STAR to ensure the integrity of the data in both systems.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  4. Status: Closed - Not Implemented

    Comments: HCFA stated that analysis of data alone would not be informative or worthwhile. However, it thought that improved STAR data would put the Medicare fiscal intermediary in a better position to improve accuracy of tentative settlements.

    Recommendation: Once those improvements are made, the Administrator, HCFA, should analyze the data to determine the reasons for inaccurate tentative settlements and, if warranted, initiate corrective measures to minimize the problems.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

 

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