Medicare

Increased HMO Oversight Could Improve Quality and Access to Care Gao ID: HEHS-95-155 August 3, 1995

This report discusses problems that the Health Care Financing Administration (HCFA) has had monitoring health maintenance organizations (HMO) it contracts with to provide services to Medicare beneficiaries, and ensuring that they comply with Medicare's performance standards. GAO found weaknesses in HCFA's quality assurance monitoring, enforcement measures, and appeal processes. Although HCFA routinely reviews HMO operations for quality, these reviews are generally perfunctory and do not consider the financial risks that HMOs transfer to providers. Moreover, HCFA collects virtually no data on services received through HMOs to enable HCFA to identify providers who may be underserving beneficiaries. In addition, HCFA's HMO oversight has two other major limitations: enforcement actions are weak, and the beneficiary appeal process is slow. HCFA's current regulatory approach of ensuring good HMO performance appears to lag behind the private sector. GAO summarized this report in testimony before Congress; see: Medicare: Increased Federal Oversight of HMOs Could Improve Quality of and Access to Care, by Sarah F. Jaggar, Director of Health Financing and Public Health Issues, before the Senate Special Committee on Aging. GAO/T-HEHS-95-229, Aug. 3 (eight pages).

GAO found that although HCFA has instituted promising improvements, its process for monitoring and enforcing Medicare HMO performance standards still suffers because: (1) HCFA quality assurance reviews are not comprehensive; (2) HCFA does not adequately assess the financial risk arrangements that HMO have with providers that can create incentives to underserve beneficiaries; (3) HCFA has been reluctant to use available enforcement tools to correct HMO deficiencies and improprieties; and (4) beneficiaries who appeal HMO denials often wait 6 months or more for resolution, causing them to incur extraneous costs. In addition, GAO found that HCFA could improve its regulatory approach to ensuring good HMO performance by adopting private-sector practices, such as: (1) requiring that HMO undergo accreditation reviews to obtain contracts with Medicare; and (2) requiring information about the care provided to beneficiaries to evaluate HMO performance when making contract decisions.

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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