Medicare: Contractor Oversight and Funding Need Improvement

GAO discussed the Medicare Program's efforts to make timely and accurate payments to medical providers and reduce fraud, waste, and abuse. GAO noted that: (1) Medicare contractors have considerable latitude in setting and implementing payment and safeguard policies; (2) the Health Care Financing Administration (HCFA), which administers Medicare, has tried to reduce the number of Medicare contractors and adopt uniform data processing systems; (3) HCFA provides no guidance to Medicare contractors on investigating beneficiary complaints and, as a result, many complaints are not referred to investigators or are not adequately investigated; (4) HCFA does not provide adequate guidance to contractors on recovering hospital overpayments; (5) contractors have weak controls over Medicare billings; (6) HCFA has not adequately overseen the establishment of payment methods for emerging medical technologies; and (7) budget cuts have undermined HCFA efforts to prevent Medicare fraud, waste, and abuse.