Summary

In 1990, GAO began a special effort to identify federal programs at high risk of waste, fraud, abuse, and mismanagement. GAO issued a series of reports in December 1992 on the fundamental causes of the problems in the high-risk areas. This report on Medicare claims is part of the second series that updates the status of this high-risk area. Readers have the following three options in ordering the high-risk series: (1) request any of the individual reports in the series, including the Overview (HR-95-1), the Guide (HR-95-2), or any of the 10 issue area reports; (2) request the Overview and the Guide as a package (HR-95-21SET); or (3) request the entire series as a package (HR-95-20SET).

GAO found that: (1) HCFA has established a requirement that raises the standards for contractor performance regarding analyses of payment data; (2) HCFA has awarded a contract for the development of a national automated claims processing system to replace the several systems currently operating; (3) the contractor performance requirement and the automated claims processing system are still in the early stages of development; (4) HCFA expects to reduce inappropriate Medicare payments through modern data analysis techniques and greater uniformity in claims processing; (5) some contractors that are responsible for reviewing the appropriateness of Medicare claims are also billing Medicare through their medical networks; and (6) Medicare's inability to keep pace with contractors' complicated financial arrangements raises concerns about the government's ability to protect Medicare funds in an increasingly entrepreneurial health care environment.