Medicare:

Flawed Data Add Millions to Teaching Hospital Payments

IMTEC-91-31: Published: Jun 4, 1991. Publicly Released: Jun 4, 1991.

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GAO discussed the: (1) accuracy of resident and bed count data that teaching hospitals submitted to the Health Care Financing Administration (HCFA); (2) effect of inaccurate data on Medicare payments to those hospitals; and (3) adequacy of HCFA internal controls over such data.

GAO found that: (1) teaching hospitals overreported the number of residents by claiming residents who were actually at Department of Defense (DOD) or Veterans Affairs (VA) facilities; (2) HCFA guidance for counting available beds was confusing, counting practices varied widely among hospitals, and efforts to clarify guidance were not successful; (3) HCFA allowed hospitals to exclude beds used to treat sick newborns if the beds were located in units not specified in HCFA guidance, even though this practice was inconsistent with a federal court decision; (4) HCFA lacked effective techniques for identifying instances in which hospitals improperly claimed DOD and VA residents; and (5) inaccurate and unverifiable data caused Medicare to pay millions in unnecessary indirect medical education costs.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: HHS agreed to collect and use resident information to reduce Medicare payments. HCFA officials are now working with the Departments of Defense and Veterans Affairs to collect the needed data. This data collection will enable HCFA to identify duplicate residents and reduce overpayments.

    Recommendation: The Secretary of Health and Human Services should direct the Administrator, HCFA, to ensure that HCFA: (1) implements plans to collect information on residents working at DOD and VA hospitals; (2) uses this information to match against resident data that teaching hospitals submit to HCFA; and (3) reports the results of this effort to the Department of Health and Human Services (HHS).

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Implemented

    Comments: Although HHS indicated that it was reviewing its policy on counting nursery beds, it stated that it did not concur with the recommendation because of problems that would be encountered in counting unoccupied beds and in accurately identifying costs.

    Recommendation: The Secretary of Health and Human Services should direct the Administrator, HCFA, to ensure that hospitals count all beds used to treat sick newborns, regardless of location, as available beds until the bed count statistic is replaced.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed - Implemented

    Comments: The Department has reported the lack of internal controls over resident data as a material weakness in its most recent FMFIA report. However, the Department disagrees that a material weakness exists with respect to available bed data.

    Recommendation: The Secretary of Health and Human Services should direct the Administrator, HCFA, to report the lack of effective internal controls over resident data and the unauditability of available bed data as a material weakness under the Federal Managers' Financial Integrity Act (FMFIA).

    Agency Affected: Department of Health and Human Services

 

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