HCFA Oversight Allows Contractor Improprieties to Continue Undetected

T-HEHS/OSI-99-174: Published: Sep 9, 1999. Publicly Released: Sep 9, 1999.

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William J. Scanlon
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Pursuant to a congressional request, GAO discussed the Health Care Financing Administration's (HCFA) efforts to monitor the activities of Medicare fee-for-service claims administration contractors, focusing on: (1) how deceptive activities became a way of doing business at some of HCFA's Medicare fee-for-service contractors; (2) why HCFA did not detect these activities through its oversight; and (3) weaknesses in HCFA's monitoring process that could allow these types of activities to recur without detection.

GAO noted that: (1) following allegations that they engaged in fraudulent or otherwise improper activities, at least eight Medicare contractors have been convicted of criminal offenses, have been fined, or have entered into civil settlements since 1993; (2) over several years, some of these contractors' employees engaged in improprieties and covered up poor performance to allow contractors to keep their Medicare business; (3) admitted or alleged improper activities included, but were not limited to, improperly screening, processing, and paying Medicare claims, destroying claims, and failing to properly collect money owed to Medicare by providers; (4) in addition, contractors falsified their performance results and engaged in activities designed to deceive HCFA and circumvent its review of contractor performance; (5) these fraudulent and improper activities have adversely affected taxpayers, providers, and beneficiaries; (6) because HCFA gave contractors too much advance notice of its oversight visits and the records that would be reviewed, it often failed to detect improper contractor activities; and (7) HCFA's oversight has other weaknesses that might allow the same types of improper contractor activities to continue undetected.

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