Medicare: Effects of Budget Reductions on Contractor Program Safeguard Activities

GAO discussed its efforts to assess Medicare's vulnerability to waste, abuse, and mismanagement. GAO noted that Medicare contractors are: (1) cutting back on medical and utilization reviews of claims that are essential in detecting and preventing erroneous payments; (2) cutting back on audits of billions of dollars in costs claimed by institutional providers; and (3) unable to pursue hundreds of millions of dollars potentially owed to Medicare by private insurance companies. GAO believes that increasing funding for program safeguard activities, and thereby cutting inappropriate program payments, could help lessen the need for difficult cuts to all providers.