Medicare: Better Guidance Is Needed To Preclude Inappropriate General and Administrative Charges
NSIAD-94-13
Published: Oct 15, 1993. Publicly Released: Oct 15, 1993.
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Highlights
GAO reviewed the Hospital Corporation of America's (HCA) general and administrative expenses for its fiscal year ended December 31, 1991, focusing on unallowable, questionable, and unsupported costs included in its Medicare cost report.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Health and Human Services | The Secretary of Health and Human Services should direct the Administrator of the Health Care Financing Administration (HCFA) to revise the Medicare cost principles for general and administrative expenses to make them more specific, consistent with the basic Medicare cost rule that a cost must be reasonable, necessary, and related to patient care to be allowable. The cost principles contained in the Federal Acquisition Regulation (FAR) and Office of Management and Budget (OMB) Circular A-21 should be used as a guide regarding the allowability of general and administrative expenses. |
Closed – Implemented
In December 1993, HCFA revised its Medicare cost principles to make alcoholic beverages, contributions, and lobbying activities expressly unallowable.
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Topics
Administrative costsCost accountingCost analysisFraudHealth insurance cost controlHospital care servicesInsurance companiesMedical recordsMedicareOverhead costs