Millions Can Be Saved by Screening Claims for Overused Services

T-HEHS-96-86: Published: Feb 8, 1996. Publicly Released: Feb 8, 1996.

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GAO discussed how Medicare can avoid paying millions of dollars in claims for unnecessary services. GAO noted that: (1) the autoadjudicated prepayment screen is an inexpensive and compatible safeguard that is an effective and highly compatible claims processing system; (2) the 6 medical procedures reviewed are especially susceptible to overuse because few financial incentives exist for physicians and patients to resist unnecessary diagnostic tests and services and patients often do not have the information necessary to question the services' need; (3) many Medicare claims processing contractors pay claims without using their computers to evaluate the patient diagnosis on the claims to determine whether the claims are reasonable; (4) if the 7 contractors reviewed had used autoadjudicated screens for the 6 procedures, they would have saved between $29 million and $150 million in 1993; (5) autoadjudicated screens would not increase claims examiners' workloads, since they do not flag claims for manual review; (6) the Health Care Financing Administration (HCFA) could save millions of dollars by developing a payment control strategy using its national claims database to examine national trends: (7) HCFA has not adequately monitored its contractors' use of prepayment screens and other safeguards and does not have the information to identify and promote best practices; and (8) HCFA is considering greater use of autoadjudicated screens in a national claims processing system, but that system will not be fully implemented until late 1999.

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