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Medicare: Renal Facility Cost Reports Probably Overstate Costs of Patient Care

HRD-93-70 Published: May 18, 1993. Publicly Released: May 24, 1993.
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Highlights

Pursuant to a congressional request, GAO reviewed Medicare dialysis payment rates and the Health Care Financing Administration's (HCFA) proposal to reduce these rates, focusing on: (1) the definitions Medicare uses to define costs for payment rate-setting; (2) the quality of the most recent audited rate-setting cost data; and (3) whether costs incurred by integrated and nonintegrated firms differ.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Health and Human Services To ensure that the future audits of dialysis facilities provide accurate and reliable cost data, the Secretary of Health and Human Services should direct the Administrator, HCFA, to revise and update HCFA audit guidance and instructions.
Closed – Implemented
HHS revised and updated its audit guidance for the recent round of ESRD audits.
Department of Health and Human Services To ensure that the future audits of dialysis facilities provide accurate and reliable cost data, the Secretary of Health and Human Services should direct the Administrator, HCFA, to ensure that the auditors understand the technical aspects of the ESRD Program.
Closed – Implemented
HHS provided training to auditors before the recent round of ESRD audits.
Department of Health and Human Services To ensure that the future audits of dialysis facilities provide accurate and reliable cost data, the Secretary of Health and Human Services should direct the Administrator, HCFA, to provide sufficient time to complete the audits.
Closed – Implemented
The agency allotted about 150 hours for each ESRD cost report audit in its recent audit effort. While this represents an increase from prior audit efforts, this amount of time is probably insufficient to ensure adequate audits. Budget constraints prevented a larger increase, according to the agency.
Department of Health and Human Services To ensure that the future audits of dialysis facilities provide accurate and reliable cost data, the Secretary of Health and Human Services should direct the Administrator, HCFA, to monitor and review the audits to ensure that audit standards are followed and required work is performed.
Closed – Implemented
The agency performed independent reviews of a portion of the audits conducted during the recent audit effort.

Full Report

Full Report (26 pages)

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Topics

Health Care
Administrative costsCost analysisHealth care cost controlHealth care facilitiesMedical economic analysisMedical services ratesMedicarePatient care servicesPaymentsUrologic diseasesDialysis