Medicare Claims

Many GAO audit reports have spotlighted the effect of management failures in the federal government--waste, inefficiency, and even scandal. Political leaders have been forced to spend too much time reacting to surprises like the Department of Housing and Urban Development debacle rather than doing the work the agencies were created to do. GAO began its high-risk program to identify those high-dollar government programs most vulnerable to fraud, waste, abuse, and mismanagement. This report is part of the program's high-risk series of reports, which examine the federal government's efforts to identify and correct problems in 17 especially vulnerable areas, fall into three main categories: lending and insuring, contracting, and accountability. Many of the root causes of the problems afflicting these government programs are traceable to the absence of fundamental processes and systems. GAO urges that future congressional oversight focus on the agency reports and audited financial statements required by the Chief Financial Officers Act, agency management's progress in correcting material weaknesses in program internal control and accounting systems, and federal agency efforts to develop and implement performance standards. The Comptroller General summarized the high-risk series in testimony before Congress; see: Government Management--Report on 17 High-Risk Areas, by Charles A. Bowsher, Comptroller General of the United States, before the Senate Committee on Governmental Affairs. GAO/T-OCG-93-2, Jan. 8, 1993 (22 pages).

GAO found that: (1) Medicare losses resulting from fraud, waste, and abuse could total 10 percent of the nation's total health care costs; (2) HCFA relies on contractors to process Medicare claims and protect program funds with payment safeguards; (3) HCFA failure to properly manage contractors' safeguards and insufficient funding exposed the program to waste, fraud, and abuse; (4) HCFA contractors often failed to investigate fraud complaints raised by Medicare beneficiaries and failed to recover $170 million in overpayments from hospitals; (5) HCFA contractors paid nearly $2 billion in claims for which other insurers were responsible; and (6) HCFA needs to strengthen contractor oversight, reduce excessive payments, and tighten billing controls.