Medicare Part B

GAO discovered large disparities in a probe of how many Medicare claims are being rejected for medical reasons in different parts of the country. The study looked at six carriers: California Blue Shield, California-Occidental, Illinois Blue Shield, Wisconsin Physician Services, North Carolina-Connecticut General, and South Carolina Blue Shield. In Southern California, for example, the insurance carrier handling Medicare claims rejects as medically unnecessary 54 of every 1,000 claims for mammograms. In contrast, in Northern California, only three claims in 10,000 for the same procedure are turned down. GAO discovered (1) sizable differences among the carriers with respect to denial rates for the services screened for medical necessity; (2) that the number of services that carriers screened for medical necessity varied markedly; and (3) that the overall denial rate for medical necessity also differed among the six carriers reviewed. At one extreme, one carrier denied as few as one service per 1,000 allowed, while at the other extreme, another carrier denied 23 services per 1,000 allowed. Medicare is a national program under which beneficiaries in different geographic areas should be receiving similar benefits. Although it may be essential for Medicare to allow for local determination of medical policy, GAO concludes that this allowance, left to itself, results in inconsistent treatment of beneficiaries and providers.