Reimbursement for National Health Service Corps Personnel

Local health clinics are responsible for reimbursing the Government for certain costs associated with health professionals assigned to them by the National Health Service Corps (NHSC). GAO examined several aspects of the reimbursement issue. Specifically, GAO looked at the Department of Health and Human Services' (HHS) calculations of the amounts that the clinics were expected to reimburse, its procedures for billing the clinics, the conditions under which it would waive the clinic's reimbursement, and its efforts to collect the reimbursement from the clinics. Additionally, GAO reviewed the clinic's procedures for setting, charging, and collecting fees for the health service they provided.

GAO found that: (1) the NHSC estimate of the total reimbursement obligation of sites was about $114 million through billing year 1979, and of that total only $13 million had been collected as of September 30, 1980; (2) NHSC methods used in the past to determine reimbursable costs were inadequate because the calculations used the projected rather than the actual salary increases which were higher and did not include proper adjustments for variable incentive pay bonuses authorized by 1979 legislation; (3) the billing technique HHS used in the past allowed sites to partially or completely eliminate their reimbursement obligation by indicating on an internal management report that revenues collected did not exceed expenses incurred and, consequently, funds were not available to meet the obligation; (4) waiver requests submitted by NHSC sites were routinely approved without being adequately reviewed or evaluated; (5) NHSC officials essentially failed to pursue collections from sites; (6) HHS headquarters, its regional offices, and NHSC sites have not given enough attention to setting and updating fees based on prevailing rates; (7) lost revenue has resulted from professional courtesy being granted to physicians and dentists, members of sites' board of directors, staff, local rescue squad members, and in some cases the families of these individuals; and (8) NHSC had no policy on how sites should pursue collections from patients with delinquent accounts.