More Can Be Done To Achieve Greater Efficiency in Contracting for Medicare Claims Processing

Most Medicare benefits are administered by the Department of Health, Education, and Welfare (HEW) through contracts with private insurance companies called intermediaries, which pay bills for services provided by health care facilities, and other contractors called carriers, which pay claims for services from doctors and suppliers. These contracts have been on a cost reimbursable basis, with neither profit nor loss realized by the contractors. Congress directed GAO to conduct a comprehensive study of the claims processing system under Medicare and determine necessary modifications for more efficient administration.