Medicare

In accordance with a provision of the Deficit Reduction Act of 1984, GAO reviewed the amounts that teaching physicians and hospitals billed to Medicare carriers to determine whether payments had been made under the requirements of the Social Security Act.

Medicare pays for the services of teaching physicians in hospitals that operate postgraduate programs for resident physicians as well as for the cost of treatment or supervision that they provide on a fee-for-service basis. To prevent paying teaching physicians twice for the same service, Medicare requirements provide that their fee-for-service costs cannot be paid unless: (1) the physician renders a personal and identifiable service; (2) the services provided are comparable to those provided to non-Medicare patients; and (3) at least 25 percent of the hospital's non-Medicare patients pay a substantial part of their physicians' bills. GAO noted that the Health Care Financing Administration (HCFA), which administers the Medicare program, has not specified what documentation is required to substantiate entitlement to Medicare reimbursement. Therefore, GAO developed criteria based on those used successfully by carriers in two HCFA regions. GAO reviewed 8,917 services provided to 1,165 patients from 10 hospitals and found that: (1) 51 percent were adequately documented; (2) the total Medicare-allowed amount for these services was $710,820, of which $175,207 was for services not adequately documented; (3) the inadequately documented services were for high-volume, low-cost services; and (4) it could not determine whether a teaching physician or resident provided the services. HCFA is in the process of developing regulations to implement the Medicare requirements and plans to publish them for comment early in 1986; therefore, GAO made no recommendations.