Medicare: Adequate Funding and Better Oversight Needed to Protect Benefit
Dollars (Testimony, 11/12/93, GAO/T-HRD-94-59).

Soaring expenditures for health care underscore the need for the
government to fund and manage Medicare judiciously, but budget
constraints have resulted in underfunding key program safeguards that
control billions of dollars in benefit payments.  In fiscal year 1993,
Medicare cost $146 billion, covered about 35 million beneficiaries, and
processed nearly 700 million claims.  Medicare has delegated much of the
responsibility for program safeguards to a national network of some 80
claims processing and payment contractors.  GAO testified that, given
shortcomings in these safeguards, any cuts in Medicare's administration
budgets should take into account their likely effect on benefit
payments.  During the past 5 years, Medicare's program safeguards
budget, on a per claim basis, has declined dramatically.  The upshot is
that opportunities to curb unnecessary Medicare expenditures are being
lost.  Strong evidence exists that with an adequately funded and managed
safeguard program, Medicare could avoid millions of dollars in
unnecessary expenditures.  GAO believes that Congress should continue to
pursue modifying budget procedures so that Medicare's safeguard funding
could be boosted without cutting spending elsewhere.  GAO also believes
that the Health Care Financing Administration needs to develop an
effective strategy to manage contractors' payment safeguard activities.

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

 REPORTNUM:  T-HRD-94-59
     TITLE:  Medicare: Adequate Funding and Better Oversight Needed to 
             Protect Benefit Dollars
      DATE:  11/12/93
   SUBJECT:  Medicare programs
             Funds management
             Health care cost control
             Claims processing
             Program abuses
             Contractor performance
             Administrative costs
             Cost effectiveness analysis
             Budget cuts
             Payments

             
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