Medicare: Reducing Fraud and Abuse Can Save Billions

GAO discussed the challenges in battling Medicare fraud and abuse, focusing on: (1) the ways providers exploit Medicare; and (2) how Medicare can be protected against fraud and abuse. GAO noted that: (1) Medicare is overwhelmed in its efforts to keep pace with fraud and abuse; (2) factors that make the Medicare claims system vulnerable to fraud and abuse include weak controls that detect questionable billing practices, few limits on those who can bill the program, and excessive reimbursement levels for certain services; (3) Medicare's budget and management problems also exacerbate these vulnerabilities; (4) the Health Care Financing Administration (HCFA) has begun several major initiatives to address long-standing problems with inappropriate Medicare payments, such as replacing the different claims processing systems with a single system, giving greater prominence to Medicare fraud and abuse activities, and initiating a new antifraud effort; and (5) despite those initiatives, HCFA has yet to develop effective ways to ensure that federal funds are spent appropriately and more demanding standards are implemented for providers seeking authority to bill Medicare.