Medicare Contractors

In overseeing Medicare claims administration contractors, the Health Care Financing Administration (HCFA) is not able to ensure effective accountability without a formal process for evaluating regional office performance. To do this, it would need to set expectations and develop standards for assessing regional offices' oversight performance, provide them with constructive feedback, and make comparative performance information available to HCFA's Administrator. It would also need to decide how to deal with regions whose performance is less than satisfactory. GAO recommends that HCFA use a consistently applied risk assessment methodology to help ensure that agency resources are used effectively and that it consolidate its review information and keep it up to date. HCFA should also identify and share best oversight practices among all reviewers.

GAO noted that: (1) HCFA is taking a number of steps to strengthen contractor oversight by its central office and 10 regional offices; (2) these include: (a) clarifying accountability for contractor oversight at the central office; (b) establishing national review teams, which combine the expertise of central and regional office staff, to conduct evaluations of contractor performance; and (c) providing detailed direction to regional office overseers to improve the consistency of contractor reviews and reporting; (3) although central and regional office officials have stated that these changes will enhance contractor oversight, most of these actions are still in the planning or early implementation stages; (4) therefore, it is too early to assess their effects; (5) even if these efforts are successful, HCFA's central and regional offices are still likely to face difficulties in working together effectively to oversee Medicare contractors; (6) until very recently, HCFA regional overseers were not directly accountable to the central office group responsible for contractor oversight activities; (7) while HCFA was reviewing a draft version of this report, the agency announced that, to improve regional accountability, it is establishing a position within each consortium to consolidate responsibility for contractor management; (8) GAO did not have time to evaluate the impact of this initiative on strengthening headquarters and regional oversight; (9) other weaknesses in its oversight management have not yet been addressed; and (10) specifically, HCFA: (a) lacks adequate management information on regional office resources used or needed for evaluating contractors; (b) since 1995, has provided late annual instructions (or none at all) on what oversight must be conducted by regional office reviewers; and (c) does not effectively employ available management tools--such as routine feedback to regional offices--to ensure that adequate contractor oversight is performed.

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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