Summary: GAO reviewed the Health Care Financing Administration's (HCFA) internal controls over Medicare payments for health care services to determine whether HCFA ensured that: (1) patients were eligible for Medicare benefits; (2) claimed services were provided, covered by Medicare, necessary, and of good quality; and (3) payments were reasonable and correct.
GAO reviewed 277 cases of potential claims processing errors from a backlog of over 2 million unresolved errors, and found that: (1) in March 1988, HCFA purged the backlog of over a million of the cases and did not plan to resolve errors in the purged cases; (2) there were 73 overpayments totalling $272,011 and 7 underpayments totalling $5,468; (3) HCFA misclassified 180 claims as duplicates because of problems in obtaining data from HCFA intermediaries responsible for processing and paying claims; (4) HCFA made little use of consulting firms' findings under contracts to review the adequacy of peer review organizations' (PRO) reviews; (5) PRO failed to detect unnecessary hospital admissions and allowed payments for incorrectly categorized diagnoses; and (6) HCFA did not report its internal control weaknesses in its Federal Managers' Financial Integrity Act (FMFIA) evaluations.
