MedicareLaboratory Fee Schedules Produced Large Beneficiary Savings but No Program Savings Gao ID: HRD-88-32 December 22, 1987
Pursuant to a legislative requirement, GAO reviewed the appropriateness and impact of Medicare's fee schedule payment system for clinical diagnostic laboratory services.
GAO found that initial fee schedules, established on a geographic basis: (1) significantly reduced beneficiary out-of-pocket costs; (2) affected neither beneficiary access to nor quality of laboratory services; (3) insignificantly reduced total payments to hospitals; (4) increased Medicare payments to hospitals for outpatient and referred-patient laboratory services; and (5) allowed about the same amount to independent laboratories and physicians as the reasonable charge system would have. GAO also found that: (1) the fee-rate caps held constant or reduced all fee rates; (2) a national fee schedule could increase total Medicare payments, since carrier rates vary widely for the same tests; (3) computation of the fee schedule based on a weighted average of the carrier rates, as capped by the 110-percent-of-median limit, would retain the reduction that resulted from the caps; and (4) the Health Care Financing Administration's method for calculating the national fee schedule, using area prevailing rates, could increase total Medicare payments.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: Team: Phone: