Actions Needed To Stop Excess Medicare Payments for Blood and Blood Products

HRD-78-172: Published: Feb 26, 1979. Publicly Released: Feb 26, 1979.

Additional Materials:


Office of Public Affairs
(202) 512-4800

An evaluation of the blood replacement practices at community and hospital blood banks was made to determine consistency with Medicare regulations. Medicare insurance for the aged and disabled covers health care services, including blood and blood products. It also reimburses hospitals for fees charged by blood banks for blood processing.

Medicare controls did not prevent unfair blood billing and replacement practices. Some hospitals charged nonreplacement fees to Medicare and to Medicare patients for blood supplied by community blood banks that charged only for processing. Hospitals often do not submit corrected bills to Medicare when blood banks release blood credits after the hospital has billed Medicare. When improper replacement practices of blood banks cease and blood banks are required to release all needed credits, the hospitals' failure to submit corrected bills will result in excess Medicare payments. Intermediaries responsible for program administration were generally unaware of the billing and replacement practices of blood banks and hospitals, or of the impact those practices have on Medicare payments.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Administrator of the Health Care Financing Administration should: revise Medicare billing instructions to more clearly require that hospitals and blood banks allow Medicare patients the same opportunities as allowed non-Medicare patients to eliminate blood fees; revise Medicare instructions to provide that nonreplacement fees charged on processing-fee-only blood are not allowable charges to Medicare; improve corrected billing requirements for late blood credits to more accurately and economically account for Medicare blood replacements; require the identification of hospitals and blood banks that have engaged in improper practices and seek recovery; require, as a condition for reimbursement of blood costs, that hospitals enter into formal agreements or understandings with community blood banks that obligate the blood banks to comply with Medicare billing and replacement instructions; require the review of blood billing and replacement practices at hospitals and blood banks as a part of the regular review and audit procedures to assure equal replacement opportunities for Medicare patients; and periodically assure that monitoring efforts applicable to the matters covered in this report are properly performed, that appropriate records are being retained by hospitals and blood that bill Medicare for patient blood use, and that corrective actions are taken as needed.

    Agency Affected:


Explore the full database of GAO's Open Recommendations »

Mar 19, 2018

Mar 8, 2018

Feb 20, 2018

Feb 8, 2018

Feb 5, 2018

Jan 30, 2018

Jan 23, 2018

Jan 17, 2018

Jan 16, 2018

Looking for more? Browse all our products here