Medicare: Millions in Potential Recoveries Not Being Sought by Contractors

GAO discussed the effectiveness of the Medicare Secondary Payer (MSP) provisions, focusing on insurance carrier contractors' efforts to recover mistaken Medicare payments after determining that beneficiaries have other insurance. GAO noted that: (1) carriers did little to recover Medicare funds from other insurers; (2) cutbacks in MSP funds hampered the contractor attempts to recover mistaken payments; (3) contractors may have paid $5.5 million to $8.8 million in mistaken Medicare payments; (4) one contractor did not attempt to recover the claims it paid during a 2-week period when information on 50,000 beneficiaries was deleted from its processing system; (5) the Health Care Financing Administration (HCFA) did not regularly collect or require contractors to keep management information on mistaken payments or the dollar value potentially due back to Medicare; (6) potentially $200 million in mistaken payments could be collected from insurers; (7) HCFA recently reallocated $3 million to contractors to pursue and recover payments; (8) a recently initiated Internal Revenue Service/Social Security Administration data match could identify several additional mistaken payments; (9) millions of dollars of claims might remain unrecovered due to Department of Health and Human Services regulations limiting the time for recovering mistaken payments; and (10) payment recoveries could considerably exceed the dollars spent on collection procedures.