Medicare Part B: Factors That Contribute to Variation in Denial Rates for
Medical Necessity Across Six Carriers (Testimony, 12/19/94,
GAO/T-PEMD-95-11).

To determine whether Medicare carriers in various parts of the country
differed significantly in denying coverage for medical treatment they
consider unnecessary, GAO analyzed Medicare Part B data on claims
processed by six Medicare carriers for 74 services that were either
expensive or heavily used.  The carriers GAO studied included California
Blue Shield, Transamerica Occidental Life Insurance, Connecticut General
Life Insurance Company, Blue Shield of South Carolina, Illinois Blue
Cross and Blue Shield, and Wisconsin Physicians' Service.  GAO found
that the magnitude of carrier denial rates for Medicare Part B claims
was generally low and persistent for two consecutive years, although
rates for some services shifted.  Medical necessity denial rates for 74
services across six carriers varied substantially.  The main reason was
that some carriers used computerized screening criteria for specific
services while others did not.  Further, a small proportion of the
providers accounted for half of the denied claims.  To a lesser degree,
the varying interpretation of national coverage standards across
carriers, differences in the way carriers treated claims with missing
information, and reporting inconsistencies also explained the variation
in carrier denial rates.

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

 REPORTNUM:  T-PEMD-95-11
     TITLE:  Medicare Part B: Factors That Contribute to Variation in 
             Denial Rates for Medical Necessity Across Six
             Carriers
      DATE:  12/19/94
   SUBJECT:  Medicare programs
             Beneficiaries
             Health care services
             Medical services rates
             Medical expense claims
             Entitlement programs
             Claims processing
             Demographic data
             Disease detection or diagnosis
             Billing procedures

             
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