Medicare

Both the traditional Medicare program and Medicare+Choice contain major information gaps that impede the ability of the Health Care Financing Administration (HCFA) to minimize program losses attributable to improper payments to claims administration contractors. HCFA does not have a clear picture of how the contractors perform with respect to fee-for-service payments, which totaled $171 billion in fiscal year 1999, or the newly designed payment systems. HCFA similarly lacks data to monitor the appropriateness of payments made to Medicare+Choice health plans and the services the enrollees receive. HCFA's systems for collecting and analyzing data on beneficiaries' use of services are seriously outmoded.

GAO noted that: (1) major information gaps exist in the Medicare program--in both traditional Medicare and Medicare Choice--that impede HCFA's ability to minimize program losses attributable to improper payments; (2) in traditional Medicare, HCFA does not have a clear picture of the individual or relative performance of Medicare's claims administration contractors, which are responsible for safeguarding the program's fee-for-service payments that totalled about $171 billion in fiscal year 1999; (3) HCFA also lacks sufficient information on newly designed payment systems to determine whether providers have delivered excessive services or stinted on patient care to inappropriately maximize payments; (4) as for Medicare Choice, HCFA similarly lacks the data needed to monitor the appropriateness of payments made to health plans and the services Medicare enrollees receive; (5) owing to a failed attempt in the 1990s to modernize Medicare's multiple information systems, HCFA's current systems remain seriously outmoded; and (6) without effective systems, the agency is not well-positioned to collect and analyze data regarding beneficiaries' use of services--information that is essential to managing the program effectively and safeguarding program payments.