Health Insurance:

Medicare and Private Payers Are Vulnerable to Fraud and Abuse

T-HRD-92-56: Published: Sep 10, 1992. Publicly Released: Sep 10, 1992.

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GAO discussed the challenges that the Medicare program faces in minimizing losses to fraud, waste, and abuse. GAO noted that: (1) the Medicare program administrators, the Health Care Financing Administration (HCFA) and its contractors, are responsible for Medicare spending, and ensuring that funds are spent appropriately and are well protected from fraud, waste, and abuse; (2) weak HCFA oversight of contractors' operations underlies some of the waste and abuse problems within the Medicare program; (3) compounding the oversight problem is the fact that funding for payment safeguards has not kept pace with the growth in claims volume; (4) Medicare payment policies permit excessive reimbursement rates for high-cost new technology and laboratory services, and loose payment controls invite exploitation by providers; and (5) the Medicare program continues to lack controls over the issuance of provider numbers, which contractors use to determine whether an applicant has been previously disciplined, has outstanding Medicare debts, or can maintain solvent business operations.

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