Health Care Financing Administration:

Three Largest Medicare Overpayment Settlements Were Improper

T-OSI-00-7: Published: Mar 28, 2000. Publicly Released: Mar 28, 2000.

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Robert H. Hast
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Pursuant to a congressional request, GAO discussed the results of its investigation of the Health Care Financing Administration's (HCFA) negotiated settlements of large overpayments to three Medicare providers between 1991 and July 1999.

GAO noted that: (1) GAO found nothing improper in the settlement of 93 of the 96 settlement agreements; (2) however, HCFA acted inappropriately in several respects as to the 1995, 1996, and 1997 settlements of the three largest overpayments; (3) the former HCFA Administrator's participation in the largest settlement raised conflict-of-interest concerns; (4) HCFA unilaterally chose not to obtain Department of Justice approval of the settlements and ignored its own regulations and internal guidance; (5) HCFA appears to have disregarded permissible settlement criteria established by regulation; (6) the settlement agreements contained questionable provisions; and (7) HCFA executed settlements without the benefit of legal counsel.

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