Health Insurance

Health insurance fraud and abuse contribute to the upward health care cost spiral confronting the United States. Only a fraction of the fraud and abuse committed against the health care system is identified and prosecuted, although that which has been detected has involved considerable sums. This waste is particularly alarming because the portion of the nation's wealth spent on health care continues to increase. Certain steps need to be taken to minimize these losses. GAO believes that the Health Care Financing Administration (HCFA) must strengthen its oversight of Medicare contractor operations. To monitor and direct contractor actions, HCFA may need to develop better information systems, more focused performance measures, and stronger contractor guidance. Unless contractors are sure that the government is committed to improving safeguard efforts, they have little incentive to do these resource-intensive activities--from investigating beneficiary complaints to reducing backlogs of identified overpayments. Consequently, GAO continues to support modifying the budget process to better enable appropriate funding for Medicare program safeguard activities. GAO also believes that Congress should consider setting up a national health care fraud commission composed of private and public payers, providers, and law enforcement agencies. Such a commission would be in a good position to consider the conflicting legal and administrative objectives confronting the health insurance industry's struggle against fraud and abuse.