High-Risk Series:


HR-97-10: Published: Feb 1, 1997. Publicly Released: Feb 1, 1997.

Additional Materials:


William J. Scanlon
(202) 512-7114


Office of Public Affairs
(202) 512-4800

GAO reviewed the challenges the federal government faces in safeguarding Medicare, the government's second largest social program.

GAO found that: (1) since GAO's last high-risk report in 1995, the government has made important strides in efforts to protect Medicare from exploitation; (2) recent legislation, the Health Insurance Portability and Accountability Act of 1996, increases funding for program safeguards, although per-claim expenditures will remain below the level of 1989 after adjusting for inflation; (3) in addition, the Health Care Financing Administration (HCFA) anticipates that it will gain enhanced oversight capacity and reduced administrative costs when the next-generation claims processing system, the Medicare Transaction System (MTS), is fully implemented, which HCFA expects to occur after the year 2000; (4) the Health and Human Services Inspector General and other federal and state agencies have banded together to fight fraud in five states in an effort called Operation Restore Trust; (5) after the first year of operation, the effort yielded more than $40 million in recoveries of payments for claims that were not allowed under Medicare rules, as well as convictions for fraud, impositions of civil monetary penalties, and the exclusion of providers from the program; (6) the act gives HCFA additional flexibility to contract with firms specializing in utilization reviews and makes more severe the penalties for Medicare fraud; (7) in addition, HCFA is improving its credentialing process for Medicare providers and is currently evaluating commercially available software for its potential to screen out some types of inappropriate claims; (8) judicious changes in Medicare's day-to-day operations entailing HCFA's improved oversight and leadership, its appropriate application of new anti-fraud-and-abuse funds, and the mitigation of MTS acquisition risks are necessary to reduce substantial future losses; and (9) as Medicare's managed care enrollment grows, HCFA must ensure that payments to health maintenance organizations (HMO) better reflect the cost of beneficiaries' care, that beneficiaries receive information about HMOs sufficient to make informed choices, and that its expanded authority to enforce HMO compliance with federal standards is used.

Below are the reports in this series:

High-Risk Series: An Overview HR-97-1, Feb 1, 1997

High-Risk Series: Quick Reference Guide HR-97-2, Feb 1, 1997

High-Risk Series: Defense Financial Management HR-97-3, Feb 1, 1997

High-Risk Series: Defense Contract Management HR-97-4, Feb 1, 1997

High-Risk Series: Defense Inventory Management HR-97-5, Feb 1, 1997

High-Risk Series: Defense Weapon Systems Acquisition HR-97-6, Feb 1, 1997

High-Risk Series: Defense Infrastructure HR-97-7, Feb 1, 1997

High-Risk Series: IRS Management HR-97-8, Feb 1, 1997

High-Risk Series: Information Management and Technology HR-97-9, Feb 1, 1997

High-Risk Series: Medicare HR-97-10, Feb 1, 1997

High-Risk Series: Student Financial Aid HR-97-11, Feb 1, 1997

High-Risk Series: Department of Housing and Urban Development HR-97-12, Feb 1, 1997

High-Risk Series: Department of Energy Contract Management HR-97-13, Feb 1, 1997

High-Risk Series: Superfund Program Management HR-97-14, Feb 1, 1997

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