Medicare:

Improper Handling of Beneficiary Complaints of Provider Fraud and Abuse

HRD-92-1: Published: Oct 2, 1991. Publicly Released: Oct 2, 1991.

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Pursuant to a congressional request, GAO provided information on Medicare's responsiveness to beneficiary complaints that carriers were not acting on complaints of provider fraud and abuse, focusing on the: (1) extent to which Medicare carrier personnel identify and refer beneficiary complaints to carrier investigative units; (2) thoroughness of carriers' investigations of complaints; and (3) impact of proposed budget cutbacks on those activities.

GAO found that: (1) at the five carriers visited, over half of the beneficiary calls involving complaints or provider fraud or abuse were not properly referred for investigation; (2) carriers often told beneficiaries to submit their complaints in writing or to resolve them with providers, even though the beneficiary described the complaint in detail over the telephone; (3) the carriers did not adequately investigate almost three-quarters of the complaints where substantial indications of potential provider fraud and abuse existed; (4) 15 of the 155 cases included substantial indications of potential fraud and abuse in that the provider had 2 or more similar, substantiated complaints within the last 2 years, or the current complaint, on its own, strongly suggested fraudulent or abusive behavior; (5) the Health Care Financing Administration (HCFA) has not developed instructions for carrier staff who initially receive beneficiary complaints on how to identify and refer those complaints for investigation; (6) annual HCFA evaluations of carrier fraud and abuse detection efforts were inadequate for the five carriers reviewed; (7) carrier officials complained that they lacked sufficient resources to thoroughly investigate all complaints of provider fraud and abuse; and (8) budget reductions in the program safeguard area are undermining fraud and abuse detection activities and resulting in large program losses, but HCFA officials believe that funds for carrier personnel who answer these complaints will be reallocated within the fiscal year 1992 budget.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Instructions were implemented as recommended in February 1992.

    Recommendation: The Secretary of Health and Human Services should direct the Administrator, HCFA, to implement draft instructions to carriers for identifying and referring beneficiary complaints of provider fraud and abuse to carrier investigative units.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Implemented

    Comments: HCFA issued recommended guidance to carriers in February 1992.

    Recommendation: The Secretary of Health and Human Services should direct the Administrator, HCFA, to establish clear guidance to carriers for thoroughly investigating beneficiary complaints.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed - Not Implemented

    Comments: HCFA does not believe that it is feasible to implement this recommendation. However, HCFA actions to implement other GAO recommendations will likely minimize the need to monitor beneficiary telephone calls.

    Recommendation: The Secretary of Health and Human Services should direct the Administrator, HCFA, to require that annual HCFA carrier evaluations be used to monitor a sample of beneficiary telephone calls to ensure that complaints of fraud and abuse are: (1) properly identified by carrier staff who initially receive them; and (2) referred to carrier investigative units.

    Agency Affected: Department of Health and Human Services

  4. Status: Closed - Implemented

    Comments: In its fiscal year 1993 budget submission, HCFA proposed that fraud and abuse be designated as a specific line item in the budget under payment safeguards. HCFA also requested a substantial increase in its budget for fraud and abuse activities from $10 million in fiscal year 1992 and $24 million in fiscal year 1993.

    Recommendation: The Secretary of Health and Human Services should direct the Administrator, HCFA, to examine the adequacy of carrier funding for fraud and abuse detection efforts and, if necessary, seek additional funding.

    Agency Affected: Department of Health and Human Services

 

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