Summary: Pursuant to a congressional request, GAO assessed the adequacy of the Health Care Financing Administration's (HCFA) and Illinois' oversight of the quality of care provided to Medicaid recipients by Chicago-area health maintenance organizations (HMO).
GAO found that: (1) Chicago's two largest HMO used incentive payments that could jeopardize the quality of care provided to Medicaid recipients; (2) stronger HMO management controls could help identify and prevent physician behavior that adversely affects quality of care; (3) unlike the Medicare program, Medicaid contractors do not have a minimum enrollment of Medicaid beneficiaries; (4) high turnover of Medicaid recipients enrolled in Chicago-area HMO could increase the incentives to inappropriately delay or deny care; (5) Chicago-area HMO made limited progress toward developing quality assurance programs; (6) HCFA, Illinois Department of Public Aid (IDPA), and Chicago-area HMO did not establish effective mechanisms to identify and correct potential underservicing and other quality-of-care problems; (7) Illinois did not take effective follow-up action after identifying potential quality-of-care problems during Medicaid compliance audits and other reviews; and (8) IDPA did not attempt to determine whether the problems previously identified through compliance reviews and peer reviews were caused by poor documentation or underservicing.
