Data Bank Unlikely to Increase Collections From Other Insurers

HEHS-94-147: Published: May 6, 1994. Publicly Released: May 6, 1994.

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GAO reviewed the Department of Health and Human Services' proposed Medicare/Medicaid data bank, focusing on whether it would: (1) improve existing Medicare and Medicaid fund recovery operations; and (2) realize greater savings beyond what the existing systems already achieve.

GAO found that: (1) although Medicare and Medicaid programs could realize substantial savings if they had more complete information on their participants' group health insurance coverage, the data bank may not measurably strengthen existing information gathering operations; (2) state Medicaid systems are also capable of providing equally useful and cost-effective health insurance information; (3) over the next 5 years, the data bank will likely increase costs by more than $100 million, will substantially increase Health Care Financing Administration (HCFA) and employer recordkeeping, and increase the nation's total health care costs without accruing significant benefits; (4) HCFA must continue to improve existing alternatives to use in place of the data bank; (5) Medicare's data match recovery efforts are still under development and states have not fully developed Medicaid third-party liability programs as required; (6) Congress needs to delay data bank implementation until it can demonstrate its cost-effectiveness and other potential benefits; (7) Congress may need to grant HCFA additional authority to impose penalties on states that do not comply with Medicaid requirements; and (8) HCFA should vigorously pursue alternatives to the data bank.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Public Law 104-226 repealed the Medicare/Medicaid Data Bank.

    Matter: Congress should delay the implementation of the Medicare/Medicaid data bank until its cost-effectiveness and other potential benefits to Medicare and Medicaid can be clearly shown.

  2. Status: Closed - Implemented

    Comments: No legislation has been introduced.

    Matter: Congress should require the Secretary of Health and Human Services to report annually on the status of HCFA ongoing and planned efforts to improve identification and recovery of claims from other insurers.

  3. Status: Closed - Implemented

    Comments: No legislation has been introduced.

    Matter: Congress should amend Medicaid law by authorizing HCFA to withhold federal matching funds when states do not comply with federal requirements for identification and recovery of claims from other insurers.


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