Medicare: Increased Federal Oversight of HMO's Could Improve Quality of and Access to Care

GAO discussed Medicare beneficiaries' access to quality care in health maintenance organizations (HMO), focusing on the Health Care Financing Administration's (HCFA): (1) monitoring of HMO compliance with quality standards; (2) enforcement actions when HMO fail to comply with these standards; and (3) implementation of beneficiaries' right to appeal HMO denials of care. GAO noted that: (1) although HCFA routinely reviews HMO operations for quality, these reviews are generally perfunctory and do not assess the financial risks HMO transfer to providers; (2) HCFA collects insufficient data on HMO services to identify providers who may be underserving Medicare beneficiaries; (3) HCFA has been reluctant to take strong action against HMO who fail to comply with Medicare standards; (4) HCFA allows 6 months or more to resolve disputes about HMO denials of care, which can create uncertainty or high costs for beneficiaries; and (5) private sector strategies to ensure good HMO performance provide models for improving federal oversight of Medicare HMO.