Problems in Administering Medicare's Health Maintenance Organization Demonstration Projects in Florida

In response to a congressional request, GAO reviewed the operations of Florida health maintenance organizations (HMO) to determine: (1) if Medicare beneficiaries were enrolled and disenrolled in HMO in a timely fashion; and (2) how a requirement that, except for emergency services, all health care services for enrolled beneficiaries must be provided or authorized by the HMO was administered.

GAO found that 6.4 percent of the beneficiaries had potentially received some out-of-plan physicians' services while they were members of an HMO. The beneficiaries had paid for about 14 percent of the services, and HMO had paid for about 53 percent because: (1) HMO had authorized the services and the doctors had sent the claim to Medicare by mistake; or (2) HMO decided to pay the claims when they learned of the circumstances of the denials. GAO found that the Medicare program correctly denied claims worth $1.9 million and incorrectly paid claims worth $700,000. Those payments represented duplicate payments because the costs of the services were included in the payment rates to HMO. GAO found that these problems resulted from HMO and Medicare coordination failures. In addition, GAO found that the internal controls for coordinating the hospital-related HMO services with the regular Medicare program were highly vulnerable to error. In about 20 percent of the hospital admissions that GAO reviewed, the Department of Health and Human Services had not advised the Medicare contractor that the beneficiaries were enrolled in individual HMO. One cause of the problem was recordkeeping delays during enrollment or disenrollment. Other problems occurred when out-of-plan services were obtained during enrollment waiting periods.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: David P. Baine Team: General Accounting Office: Human Resources Division Phone: (202) 512-7101