Summary: Medicare's size and mission make it an attractive target for exploitation. That wrongdoers continue to dodge safeguards underscores the need for increasingly sophisticated ways to protect against system abuses. Improved oversight and leadership at the Health Care Financing Administration (HCFA), the mitigation of risks involved in acquiring Medicare's new multibillion dollar automated claims processing system--the Medicare Transaction System, and the appropriate use of new anti-fraud-and-abuse funds should help stem substantial losses in the future. Moreover, as Medicare's managed care enrollment grows, HCFA needs to ensure that beneficiaries receive enough information about health maintenance organizations (HMO) to make informed choices and that the agency enforces HMO compliance with federal standards. How HCFA will use the funding and authority provided under the Health Insurance Portability and Accountability Act of 1996 to improve its oversight over Medicare expenditures has not yet been determined. However, HCFA's earlier efforts to oversee fee-for-service contractors, the acquisition of the Medicare Transaction System, and Medicare managed care plans were plagued by weak monitoring, poor coordination, and delays. In GAO's view, HCFA's prospects for successfully combatting Medicare fraud and abuse are unclear.
