Summary: Medicare's vulnerability to waste, fraud, and abuse stems from several factors: (1) higher-than-market rates for some services, (2) inadequate checks for detecting fraud and abuse, (3) superficial criteria for confirming the authenticity of providers billing the program, and (4) weak enforcement efforts. Various health care management techniques help private payers overcome these programs, but Medicare generally does not use these methods. The program;s pricing methods and controls over utilization have not kept pace with financing and delivery changes during the past 30 years. To some extent, the predicament inherent in public programs--the uncertain line between adequate managerial control and excessive government intervention--helps explain the dissimilarity in the ways that Medicare and private health insurers run their respective "plans." GAO believes that a viable strategy for remedying the program;s weaknesses involved adapting the health care management approach of private payers to Medicare's public payer role.
