Medicare

GAO reviewed the Health Care Financing Administration's (HCFA) and Medicare contractors' actions in response to GAO recommendations on erroneous payments of claims for which Medicare was not responsible. GAO focused on: (1) contractor incentives to improve billing procedures; and (2) controls to ensure that Medicare acted as secondary payer when insurance companies had primary payment responsibility.

GAO found that: (1) while Medicare saved about $1.4 billion in fiscal year 1987 by identifying secondary payment claims, HCFA indicated that implementation of secondary payer initiatives fell short of expectations because many insurers were not identified as primary payers; and (2) one contractor did not reimburse Medicare for an estimated $10 million in erroneous claims for which it had primary responsibility. GAO also found that HCFA contractors: (1) lacked adequate incentives to comply with the secondary payer provisions; (2) submitted incomplete or inaccurate data for inclusion in the HCFA database for identifying and billing beneficiaries' other insurers; (3) failed to use available data to identify and seek recoveries for erroneous payments; (4) did not follow HCFA requirements for obtaining data on new beneficiaries' insurance coverage before paying claims; and (5) have no incentives to establish secondary payment controls, since there is no penalty for erroneous payments and the contractors profit by not making payments for which they have primary responsibility.

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.

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