Improving Medicare and Medicaid Systems To Control Payments for Unnecessary Physicians' Services
HRD-83-16
Published: Feb 08, 1983. Publicly Released: Feb 08, 1983.
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Highlights
GAO reviewed the Medicare and Medicaid programs to assess the mechanisms that paying agents under these programs are using to identify and prevent reimbursement to physicians and suppliers for medically unnecessary services and to recoup payments made for such services. The objectives of the review were to: (1) assess and compare the costs and benefits of the prepayment and postpayment utilization review (UR) functions and a representative number of carriers and state Medicaid agencies; (2) identify probable causes for the variations in the performance of these UR functions; and (3) evaluate the Health Care Financing Administration's (HCFA) role, particularly under Medicare, in providing direction to these activities.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Health and Human Services | The Secretary of Health and Human Services (HHS) should direct the Administrator, HCFA, to: (1) compare the prepayment utilization edits used by Medicare carriers, identify the more effective ones in terms of valid denials, and require their implementation, except where a carrier has a reasonable basis for believing that the implementation on a particular edit would not be cost beneficial; and (2) require that prepayment UR costs be reported separately from other claims processing costs to allow for valid analysis of carrier costs and related benefits in conducting prepayment UR. |
Closed – Implemented
Effective October 1, 1984, 14 prepayment UR screens were mandated for all Medicare carriers. UR costs were also segregated from other claims processing costs for fiscal year 1985.
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| Department of Health and Human Services | The Secretary of Health and Human Services should direct the Administrator, HCFA, to: (1) require that the costs and benefits associated with carrier postpayment UR be reported separately from claims processing costs for use in determining the effectiveness of postpayment UR operations; and (2) ensure that the HCFA regional offices evaluate carrier effectiveness on postpayment UR's regarding the appropriateness of the selection criteria used for full-scale reviews, and whether overpayments are computed and recovered when overutilization is identified. |
Closed – Implemented
HHS did not agree with the first part of this recommendation and intends to take no action. The second part was implemented, effective October 1, 1984, when the Contractor Performance Evaluation Program included a specific element for postpayment review.
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| Department of Health and Human Services | The Secretary of Health and Human Services should direct the Administrator, HCFA, in accordance with due process requirements, to: (1) exclude providers who remain on prepayment review for over a specified period of time because they refuse to correct their abusive billing practices; and (2) make it clear to carriers which peer review mechanisms, besides professional standards review organizations, are acceptable for initiating exclusion procedures. |
Closed – Implemented
In 1983, the Office of the Inspector General (OIG) assumed responsibility for administrative sanctions of providers from HCFA. In 1983 and 1984, at least 20 providers were successfully prosecuted for medically unnecessary or poor quality services.
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| Department of Health and Human Services | The Secretary of Health and Human Services should direct the Administrator, HCFA, to: (1) add to 42 C.F.R. 447.45(f)(1)(ii) a requirement that a minimum number of automated medical necessity edits be tested and, where cost effective, implemented in all states with the Medicaid management information system; (2) develop guidelines for state Medicaid programs seeking reapproval of their Medicaid management information systems to use in reporting costs and benefits of their UR efforts; and (3) provide state Medicaid programs information on prepayment UR edits that are being successfully used by Medicare carriers and encourage the exchange of information on the edits between carriers and state agencies. |
Closed – Implemented
Except for revising the State Medicaid Manual to provide for the guidelines contemplated in the second part of this recommendation, HHS does not intend to require more information from the individual states.
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Topics
Cost controlHealth care costsHealth care servicesMedicaidMedicareProgram evaluationOverpaymentsPhysiciansUtilization reviewAdministrative costs