Summary: GAO reviewed Medicare tentative settlements of institutional providers' claims to determine: (1) whether such settlements resulted in excessive overpayments; and (2) the results of those excessive overpayments.
GAO found that: (1) the Health Care Financing Administration's (HCFA) hospital cost report information system (HCRIS) data for fiscal years (FY) 1985 to 1987 show that final cost audits identified net hospital excessive payments totalling about $4 billion; (2) lack of adequate data makes it difficult to determine the effect of excessive tentative settlements on the Medicare trust fund; (3) between FY 1987 and 1990, HCRIS data on over 21,000 final settlements to Medicare hospitals showed that only 25 percent of the tentative settlements were recorded; (4) intermediaries failed to record tentative settlement information in HCRIS and system tracking for audit and reimbursement (STAR) databases; and (5) incomplete and inaccurate HCFA information systems limit the knowledge available on excessive tentative settlements and associated interest costs.
