Medicare Part B:

Reliability of Claims Processing Across Four Carriers

PEMD-93-27: Published: Aug 11, 1993. Publicly Released: Aug 11, 1993.

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Pursuant to a congressional request, GAO reviewed the methods used for approving or denying Medicare Part B claims.

GAO found that: (1) carriers' methods for determining whether a Medicare Part B claim represents a reasonable and medically necessary expense vary because the Health Care Financing Administration (HCFA) gives carriers wide latitude in setting their criteria for such determinations; (2) claims for similar medical services are not treated consistently by all carriers; (3) HCFA policies encourage carriers to process claims quickly, which could lower the reliability of the determinations; (4) carriers will probably reduce their medical necessity reviews because HCFA has reduced the budget for such reviews in order to meet appropriation limitations; (5) carriers have consulted with their local medical communities to establish criteria for determining medical necessity, but they do not systematically assess their instructions for applying those criteria; and (6) carriers have internal controls for assessing the reliability of their claims review process, but their ability to detect ambiguity in medical policy is limited.

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