Modern Management Strategies Could Curb Fraud, Waste, and Abuse

T-HEHS-95-227: Published: Jul 31, 1995. Publicly Released: Jul 31, 1995.

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GAO discussed the factors that make the Medicare program vulnerable to fraud and abuse and the health care management strategies used by the private sector to deal with similar problems. GAO noted that: (1) Medicare's vulnerability stems from higher-than-market rates for certain services, inadequate checks for detecting fraud and abuse, superficial criteria for confirming the authenticity of providers billing the program, and weak enforcement efforts; (2) Medicare does not use successful private sector techniques to deal with fraud and abuse, such as competitive pricing strategies and strong controls over utilization; (3) Medicare's pricing methods and utilization controls are not well suited for the current health care environment; (4) the uncertain line between adequate managerial control and excessive government intervention may explain why Medicare and private health insurers administer their plans so differently; and (5) Medicare could remedy its weaknesses by adopting private sector management approaches, such as modernized information systems to detect fraud and abuse and more rigorous criteria for granting authorization to bill the program.

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