Quality of Care Provided Medicaid Recipients by Chicago-Area HMOs

GAO discussed the oversight of Chicago-area health maintenance organizations (HMO) serving Medicaid recipients. GAO noted that: (1) from fiscal year (FY) 1986 through FY 1988, over 58,000 Medicaid recipients voluntarily left their HMO, but neither Illinois nor HMO conducted patient satisfaction surveys to determine the reasons for their dissatisfaction; (2) medical records lacked evidence that HMO adequately provided preventive health services to children and pregnant women, as required; (3) an Illinois audit indicated that 57 percent of enrollees at five HMO had no record of having received services from their HMO; (4) HMO lacked adequate documentation of the services provided to HMO enrollees; (5) in FY 1987, Illinois required HMO to submit detailed data on health services provided to Medicaid recipients and began to assess noncompliance penalties, but such actions did not effectively ensure the submission of complete and accurate data; (6) HMO used various physician incentives to manage care, some of which could encourage underservicing and high turnover in HMO participation; (7) small groups of physicians handling most of the responsibility for managing the provided care could result in high substantial financial risks for those physicians; and (8) such small groups of physicians were not required to help ensure that Medicaid enrollees receive adequate quality of care.