Medicare: HCFA Oversight Allows Contractor Improprieties to Continue
Undetected (Testimony, 09/09/1999, GAO/T-HEHS/OSI-99-174).

The Health Care Financing Administration (HCFA) paid its Medicare
fee-for-service claims administration contractors $1.6 billion in fiscal
year 1998 to serve as the program's first line of defense against
inappropriate and fraudulent claims. Since 1993, eight contractors have
been convicted of criminal offenses, have been fined, or have entered
into civil settlements. Several of their employees engaged in
improprieties and covered up poor performance to allow contractors to
keep their Medicare business. Improper activities included improperly
screening, processing, and paying claims; destroying claims; and failing
to properly collect money providers owed Medicare. Contractors also
falsified their performance results and tried to deceive HCFA and
circumvent its performance reviews. HCFA often failed to detect improper
activities because it gave contractors too much advance notice of its
oversight visits and record reviews. Weaknesses in HCFA's current
oversight might allow the same types of activities to continue
undetected. GAO believes that HCFA plans to act on recommendations GAO
made in July 1999 regarding its contractor management policy and plans,
assessment, evaluation, and oversight. Although this will help improve
its management and oversight of the contractors, it will not make
Medicare less vulnerable to their abuses.

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

 REPORTNUM:  T-HEHS/OSI-99-174
     TITLE:  Medicare: HCFA Oversight Allows Contractor Improprieties
	     to Continue Undetected
      DATE:  09/09/1999
   SUBJECT:  Claims processing
	     Overpayments
	     Fraud
	     Internal controls
	     Contract performance
	     Program abuses
	     Contract oversight
	     Contractor violations
	     Fines (penalties)
	     Health insurance
IDENTIFIER:  Medicare Program
	     Medicare Contractor Performance Evaluation Program
	     Blue Cross and Blue Shield Insurance Benefit Plan
	     Medicare Fee-for-Service Program