Medicare and Medicaid:

Opportunities to Save Program Dollars by Reducing Fraud and Abuse

T-HEHS-95-110: Published: Mar 22, 1995. Publicly Released: Mar 22, 1995.

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GAO discussed Medicare and Medicaid health care cost savings. GAO noted that: (1) Medicare and Medicaid are overwhelmed by numerous profiteers who abuse and defraud the programs; (2) the fee-for-service system gives providers strong incentives to overprovide and overbill for services; (3) the programs have weak fraud and abuse controls to detect questionable billing practices, and few limits on who can bill them; (4) the Health Care Financing Administration (HCFA) could use its substantial claims data to identify abusive providers and to establish benchmarks to measure corrective actions' success; (5) HCFA is developing a single Medicare claims processing system to improve its data collection and management information and is emphasizing Medicare fraud and abuse activities; (6) Medicaid's administrative complexity makes it vulnerable to fraud and abuse; (7) there is little chance that unscrupulous providers will be prosecuted for fraud, required to make restitution, or prevented from participating indirectly in the programs; (8) states have implemented some systematic controls and recovery methods for their Medicaid programs; and (9) problem-solving options include increased use of managed care strategies, increased funding for fraud and abuse detection operations, stricter eligibility criteria for providers to qualify for billing authority, and various proposed administrative reforms.

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