Medicare: Modern Management Strategies Needed to Curb Program
Exploitation (Testimony, 06/15/95, GAO/T-HEHS-95-183).

Medicare's vulnerability to provider exploitation of its billing system
stems from a combination of factors: (1) higher-than-market rates for
some services, (2) inadequate checks for detecting fraud and abuse, (3)
superficial criteria for confirming the authenticity of providers
billing the program, and (4) weak enforcement efforts.  Various health
care management techniques help private payers avoid these problems, but
Medicare generally does not use these techniques.  The program's pricing
methods and controls over utilization have not kept pace with changes in
health care financing and delivery.  To some extent, the predicament
inherent in public programs--the uncertain line between adequate
managerial control and excessive government intervention--helps explains
the dissimilarity in the ways in which Medicare and private health
insurers run their respective "plans." GAO believes that a viable
strategy for remedying the program's weaknesses consists of adapting the
health care management approach of private payers to Medicare's public
payer role.  This would entail (1) more competitively developed payment
rates, (2) beefed-up fraud and abuse detection that uses modern
information systems, and (3) more rigorous criteria for granting
authorization to bill the program.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-HEHS-95-183
     TITLE:  Medicare: Modern Management Strategies Needed to Curb 
             Program Exploitation
      DATE:  06/15/95
   SUBJECT:  Medicare programs
             Health care cost control
             Claims processing
             Questionable payments
             Fraud
             Program abuses
             Medical expense claims
             Medical services rates
             Overpayments
             Risk management

             
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