Medicare: HCFA Could Do More to Identify and Collect Overpayments

Highlights

Pursuant to a congressional request, GAO provided information on efforts to recover Medicare's overpayments, focusing on: (1) how the Health Care Financing Administration (HCFA) and its contractors identify potential overpayments, and whether techniques used by recovery auditors would improve overpayment identification; (2) how well HCFA and its contractors collect overpayments once they are identified, and whether the services of recovery auditors would improve HCFA collection efforts; and (3) what challenges HCFA would face if it were required to hire recovery auditors to augment its overpayment identification and collection activities.

Recommendations

Matter for Congressional Consideration

Matter	Status	Comments
Congress should consider increasing HCFA's Medicare Integrity Program funds to allow an expansion of postpayment and other effective program safeguard activities, and require HCFA to report on the financial returns from these and other program safeguard investments.	Closed – Implemented	For fiscal year 2006, the Congress increased its appropriation for program integrity funds by $100 million in addition to the amount of $720 million, which is the maximum scheduled in the Health Insurance Portability and Accountability Act of 1996. In the Deficit Reduction Act of 2005, the Congress also included the Medi-Medi program into the Medicare Integrity Program, with funding specified in the law. Medi-Medi matches Medicare and Medicaid claims, to identify providers with questionable billing to these programs. In fiscal year 2007, funding under the continuing resolution was at $720 million, with $24 million for the Medi-Medi program. In fiscal year 2008, funding for MIP was $720 million, the funding for the Medi-Medi program was $36 million. In fiscal year 2009, estimated funding for MIP is $720 million, the funding for the Medi-Medi program is estimated to be $48 million.
Because HCFA has had difficulties gaining the cooperation of health insurers in identifying beneficiaries covered by other insurance under the Medicare Secondary Payer Program, Congress should consider requiring all private health insurers to comply with HCFA requests for the names and identifying information of their enrolled beneficiaries.	Closed – Implemented	The Congress acted upon this matter, through Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (42 U.S.C. 1395y(b)(7)&(b)(8)), which required submission of enrollment information by group health plans to the Secretary of the Department of Health and Human Services so that the information could be used to establish whether Medicare was the primary or secondary payor for enrolled individuals.

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Health Care Financing Administration	To improve overpayment identification and collection, the Administrator, HCFA, should require that the effectiveness of prepayment and postpayment activities be evaluated to determine the relative benefits of various prepayment and postpayment safeguards.	Closed – Not Implemented CMS has not announced any plans for such an evaluation.
Health Care Financing Administration	The Administrator, HCFA, should require that all debt be transferred to the Department of Health and Human Services (HHS) Program Support Center for collection or referral to Treasury for collection as soon as it becomes delinquent and is determined to be eligible for transfer. For its current backlog of debt that is determined to be eligible, HCFA should validate and refer such debt to HHS' Program Support Center as quickly as possible.	Closed – Implemented Following GAO's guidance in the report and the recommendation, the agency lowered the dollar limit of eligible debt to be referred to $25, ordered the contractors to begin referring debt as it became delinquent as well as referring from its backlog of aged debt, and set forth a time frame for completion of all eligible delinquent debt--by the end of fiscal year 2002. Through its current debt referral process, HHS collected about $20 million in fiscal year 2001, and about $28 million for the first 9 months of fiscal year 2002.

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Topics

Health Care

Claims processingContract oversightDebt collectionGovernment collectionsHealth insuranceHealth insurance cost controlInternal controlsMedicaidMedicareOverpayments