Health Care:

Actions to Terminate Problem Hospitals From Medicare Are Inadequate

HRD-91-54: Published: Sep 5, 1991. Publicly Released: Sep 5, 1991.

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GAO provided information on the Health Care Financing Administration's (HCFA) lack of compliance with regulations governing the termination of acute care hospitals from the Medicare program when deficiencies are not corrected within required time frames, focusing on: (1) specific areas that need improvement; and (2) alternative enforcement options that can be used against problem hospitals to supplement termination.

GAO found that: (1) HCFA is not sending termination notices to all hospitals that have not corrected problems identified by the Joint Commission on Accreditation of Healthcare Organizations within 75 days after the initial accreditation survey and is not terminating problem hospitals from the Medicare program when corrective action is not taken within the required 90 days; (2) from October 1, 1986, to October 31, 1989, surveyors in the 5 regions visited identified 195 accredited and nonaccredited acute care hospitals that were not complying with the Medicare conditions of participation, and of these hospitals 147 hospitals corrected the identified deficiencies and 2 were terminated from the program within the required 90 days; (3) HCFA rarely terminates hospitals from the Medicare program, since some HCFA regional office personnel believe that termination is warranted only if a hospital has a history of serious problems and does not seem inclined to correct them and that state agency surveyors' findings may not be accurate; (4) state health care officials routinely used such intermediate sanctions as assessing monetary penalties or fines for noncompliance or failure to correct deficiencies within certain time frames, publishing in the local media adverse reports of sanctions imposed on hospitals for quality of care violations, and suspending all or some hospital admissions or services until corrective action is taken on identified problems, in lieu of terminating the hospitals outright; and (5) under existing regulations, HCFA can publicly identify hospitals that have been issued termination notices, but since it is not issuing termination notices as frequently as it should, the publicity aspect of this enforcement mechanism is muted.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: VA believes developing intermediate sanctions as an alternative to termination is problematic. It suggests that GAO identify possible options for less severe sanctions.

    Recommendation: The Secretary of Health and Human Services should direct HCFA to comply with termination procedures pertaining to hospitals that are not in compliance with Medicare conditions of participation. If the Secretary determines that the initiation of termination action against noncomplying hospitals is too harsh a sanction for HCFA to pursue, the Secretary should develop a proposal to Congress authorizing HCFA use of alternative enforcement actions.

    Agency Affected: Department of Health and Human Services


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