Medicare Part B: Inconsistent Denial Rates for Medical Necessity Across
Six Carriers (Testimony, 03/29/94, GAO/T-PEMD-94-17).

GAO discovered large disparities in a probe of how many Medicare claims
are being rejected for medical reasons in different parts of the
country. The study looked at six carriers: California Blue Shield,
California-Occidental, Illinois Blue Shield, Wisconsin Physician
Services, North Carolina-Connecticut General, and South Carolina Blue
Shield. In Southern California, for example, the insurance carrier
handling Medicare claims rejects as medically unnecessary 54 of every
1,000 claims for mammograms. In contrast, in Northern California, only
three claims in 10,000 for the same procedure are turned down. GAO
discovered (1) sizable differences among the carriers with respect to
denial rates for the services screened for medical necessity; (2) that
the number of services that carriers screened for medical necessity
varied markedly; and (3) that the overall denial rate for medical
necessity also differed among the six carriers reviewed. At one extreme,
one carrier denied as few as one service per 1,000 allowed, while at the
other extreme, another carrier denied 23 services per 1,000 allowed.
Medicare is a national program under which beneficiaries in different
geographic areas should be receiving similar benefits. Although it may
be essential for Medicare to allow for local determination of medical
policy, GAO concludes that this allowance, left to itself, results in
inconsistent treatment of beneficiaries and providers.

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

 REPORTNUM:  T-PEMD-94-17
     TITLE:  Medicare Part B: Inconsistent Denial Rates for Medical 
             Necessity Across Six Carriers
      DATE:  03/29/94
   SUBJECT:  Medicare programs
             Beneficiaries
             Health care services
             Medical services rates
             Medical expense claims
             Entitlement programs
             Claims processing
             Elderly persons
             Health services administration
             Billing procedures
IDENTIFIER:  California
             North Carolina
             South Carolina
             Illinois
             Wisconsin
             
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