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Medicare Billing: Commercial System Could Save Hundreds of Millions Annually

AIMD-98-91 Published: Apr 15, 1998. Publicly Released: May 19, 1998.
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Highlights

Pursuant to a congressional request, GAO reviewed whether the Health Care Financing Administration (HCFA) used an adequate methodology for testing the commercial claims auditing system for potential nationwide implementation with its Medicare claims processing system.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Health Care Financing Administration To implement HCFA's current plans to expeditiously realize dollar savings in the Medicare program through the use of claims auditing edits, the Administrator, HCFA, should proceed immediately to purchase or lease existing comprehensive commercial claims auditing edits and begin a phased national implementation.
Closed – Implemented
HCFA acquired a license to use claims auditing edits software for the Medicare program in September 1998. HCFA began national implementation of the software in October 1998.
Health Care Financing Administration To implement HCFA's current plans to expeditiously realize dollar savings in the Medicare program through the use of claims auditing edits, the Administrator, HCFA, should require, in any competition, that vendors have comprehensive claims auditing edits, which at a minimum address the mutually exclusive, incidental procedure, and diagnosis-to-procedure categories of inappropriate billing codes.
Closed – Implemented
HCFA licensed commercial software for two years that included mutually exclusive and procedure-to-procedure edits, but not diagnostic-to-procedure edits because of limitations in HCFA's systems. HCFA has no further plans to issue RFPs for commercial edits.

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Topics

Health Care
Claims processingCommercial productsHealth care costsHealth care programsHealth insurance cost controlManagement information systemsMedical expense claimsMedicareHealth care financingPhysicians