Medicare: Incentives Needed to Assure Private Insurers Pay Before Medicare

Highlights

GAO reviewed the Health Care Financing Administration's (HCFA) and Medicare contractors' actions in response to GAO recommendations on erroneous payments of claims for which Medicare was not responsible. GAO focused on: (1) contractor incentives to improve billing procedures; and (2) controls to ensure that Medicare acted as secondary payer when insurance companies had primary payment responsibility.

Recommendations

Matter for Congressional Consideration

Matter	Status	Comments
Congress should amend the Social Security Act to establish the government's right to collect twice the amounts owed from insurers that do not properly treat Medicare as the secondary payer.	Closed – Implemented	The Omnibus Budget Reconciliation Act of 1989 authorized collection of double damages from insurers who violate Medicare secondary payer provisions.

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Department of Health and Human Services	The Secretary of Health and Human Services should direct the Administrator, HCFA, to establish Contractor Performance Evaluation Program standards and use them to evaluate the effectiveness with which contractors implement and use the controls HCFA designed to prevent Medicare from erroneously paying as the primary payer. These standards should measure the extent to which contractors: (1) provide to the Regional Data Exchange System (RDES) acceptably formatted and complete quarterly data on beneficiaries that have insurance coverage other than Medicare; (2) use RDES data to update their insurance files, help prevent future payment errors, and make timely recovery of previous overpayments; and (3) comply with HCFA instructions for researching claims of new beneficiaries for private insurance coverage.	Closed – Implemented The HCFA 1990 Contractor Performance Evaluation Program includes standards for RDES.

Full Report

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Topics

Health Care

Accounting proceduresBeneficiariesContract performanceErroneous paymentsHealth insurance cost controlInsurance companiesInternal controlsMedical expense claimsMedicareUnderwriting standards