Use of a Separate Carrier To Process Medicare Claims for Railroad Retirement Beneficiaries

Pursuant to a congressional request, GAO updated the findings and conclusions of a previous report which recommended that the Medicare claims for physicians' and other medical services applicable to beneficiaries of the Railroad Retirement Board be processed by the same contractors that process such claims for most other Medicare beneficiaries.

GAO noted that, although its recommendation concerning the status of the common carrier is still valid and represents the most preferable course of action, it has proven controversial, and Congress has chosen not to act on it. GAO believes that: (1) there are additional administrative costs associated with the existing arrangement irrespective of how they are estimated; and (2) the common carrier's assertion of offsetting budgetary savings in lower benefit dollars is not supportable due to limitations in the methodology used to compute them. GAO concluded that adopting the earlier recommendation would result in estimated annual savings of about $6 million.