Medicare: Excessive Payments Support the Proliferation of Costly Technology
HRD-92-59
Published: May 27, 1992. Publicly Released: Jun 30, 1992.
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Highlights
Pursuant to a congressional request, GAO compared Medicare payment levels with providers' costs for such high-technology radiology services as magnetic resonance imaging (MRI) and Computed Tomography, to determine whether the Health Care Financing Administration (HCFA) has adjusted technical component payments to reflect cost decreases.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Health and Human Services | The Secretary of Health and Human Services (HHS) should require the Administrator, HCFA, to survey the technical component costs incurred by facilities providing radiology services and revise the fee schedule to more accurately reflect the unit costs incurred by high-volume, efficient providers. |
HCFA contracted with a consulting firm to survey physicians and obtain detailed practice expense information, however the survey was abandoned due to a low response rate. Instead, HCFA is using alternate methodology to adjust the practice expense component of the physician fee schedule to reflect resources used rather than physicians' charges. The Balanced Budget Act of 1997 requires that HCFA delay implementation of the new resource-based practice expense fee schedule until 1999. The Congress also required that the revisions to the fee schedule be budget neutral and be based on actual data on equipment utilization.
|
| Department of Health and Human Services | The Secretary of Health and Human Services should require the Administrator, HCFA, to periodically adjust technical component payments to reflect changing costs, with annual payment reviews for procedures that use high-cost, evolving technologies. |
HHS agreed that periodic adjustments are needed, but did not support annual payment reviews for evolving technologies.
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| Department of Health and Human Services | When new radiology services are approved for Medicare coverage, the Secretary of Health and Human Services should require the Administrator, HCFA, to set technical component payment rates that reflect the costs incurred by high-volume, efficient providers. |
HHS stated that it must have the discretion to determine the methodology used in setting technical component allowances, but agreed that volume and efficiency should be among the major considerations.
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Topics
Disease detection or diagnosisHealth care cost controlHealth care facilitiesHealth insurance cost controlMedical equipmentMedical services ratesMedicareQuestionable paymentsState-administered programsMedicare payments