Medicare

Health Care Financing Administration (HCFA) contractors perform five main types of activity under the Medicare Integrity Program, which was established in 1996 to safeguard Medicare from fraud, waste, and abuse. The program has predictable, assured funding and HCFA's contractors are better able than before to plan and implement their safeguard strategy and efforts. HCFA has recently hired program contractors, and it is emphasizing prepayment claims reviews to promote correct claims payment and avoid the difficulty of seeking repayment from providers when claims are paid in error. HCFA has taken or plans to take corrective action to improve important areas identified by audit reports under the Chief Financial Officers Act. It is also taking seriously its responsibilities to improve program safeguard operations in response to recommendations from GAO and from the Office of the Inspector General. HCFA will be better able to measure the program's effects with more time and better data.

GAO noted that: (1) total program safeguard expenditures began to increase in FY 1998 and will continue to do so through FY 2003; (2) further, between FY 1995 and FY 1998 expenditures on four of the five safeguard activities increased, and expenditures for all activities will have increased from FY 1995 levels in FY 2000; (3) of the five activities, medical review has experienced the largest overall increase; (4) HCFA has taken a number of actions to better protect Medicare and to promote more efficient and effective contractor safeguard operations; (5) HCFA also recently selected 13 MIP contractors that will initially supplement, rather than take over, the safeguard activities of the contractors that process claims; (6) HCFA is using the results of both GAO audits and those of the OIG to improve its MIP management; (7) HCFA has taken, or plans to take, additional corrective actions that respond to the Chief Financial Officers Act audits from 1996 through 1998 and has also used the results of other OIG audits to better manage its program safeguard activities; (8) additionally, HCFA has agreed with and implemented many, but not all, of GAO's recommendations related to program safeguards; (9) despite HCFA's efforts to improve its safeguard activities, it is both premature and difficult to quantify the effects of MIP on controlling Medicare fraud and abuse; (10) although MIP started in FY 1997, the first year of increased program safeguard funding under MIP was FY 1998, thus leaving less than 1 year for the effects of this increased funding to occur and to be measured; (11) perhaps more importantly, HCFA does not have the kind of data needed to measure the effectiveness of its efforts, which also affected GAO's ability to assess MIP's effectiveness; (12) HCFA recognizes the need for this kind of data and has plans for obtaining them in the future; but, in many cases, implementation of data system changes must wait until next year because HCFA is devoting considerable effort to ensuring that its data systems are year-2000 compliant; (13) there are, however, important intangible benefits associated with MIP, such as deterring providers from submitting abusive claims; and (14) according to HCFA and its claims administration contractors, other benefits include increased HCFA oversight of contractor safeguard operations and an increased awareness of and focus on combating fraud and abuse by HCFA and its contractors.