Medicare:

Program Safeguard Activities Expand, but Results Difficult to Measure

HEHS-99-165: Published: Aug 4, 1999. Publicly Released: Aug 4, 1999.

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Pursuant to a congressional request, GAO reviewed the Health Care Financing Administration's (HCFA) efforts to safeguard Medicare payments, focusing on: (1) how Medicare program safeguard activities have changed from fiscal years (FY) 1995 to 1999 and what changes are planned for FY 2000; (2) HCFA's actions to better manage its program safeguard activities, which respond to key findings from GAO's previous audit reports and those of the Department of Health and Human Services Office of Inspector General (OIG); and (3) the initial effects of the Medicare Integrity Program (MIP) on controlling Medicare fraud and abuse, including the adequacy of HCFA's data for measuring the effectiveness of its program safeguard activities.

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.

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