Summary: Pursuant to a legislative requirement, GAO reviewed the Health Care Financing Administration's (HCFA) proposed plan to establish its own hearings and appeals unit to handle Medicare hearings, at an estimated cost of $15 million.
GAO found that, under the proposed plan, HCFA: (1) would use 42 administrative law judges (ALJ) compared to the 666 the Social Security Administration (SSA) currently uses; (2) would hear an estimated 24,000 Medicare cases each year; (3) believes it can provide faster and less expensive hearings and estimates that it will complete each case within 60 days at an average cost of about $420; (4) anticipates paying ALJ at a GS-14 level; (5) would centralize its operations to improve case-load management and promote consistency in the application of federal laws and regulations; and (6) hopes to use telephone hearings in 50 percent of the cases. GAO also found that HCFA has: (1) not tested its approach and lacks empirical evidence to support its key assumptions; (2) little documentation for its proposal; and (3) no experience to ensure that the program will work as planned.
