Summary: New legislation would amend the Social Security Act and restrict payments for costs attributable to the Medicare Program made to a provider of services. The payments would be resricted to the extent that the payments exceed the proportional share of such cost, as measured by days of utilization or provider charges, until such time as evidence can be produced which, in the judgment of the Comptroller General and by the Secretary of Health and Human Services, justifies payment of the higher proportional share. It also mandates the Comptroller General to undertake a study to determine those providers for which payment of any differential is justified, and the extent to which such payments are justified. The results of the study are to be submitted prior to April 1, 1981. Additionally, the Secretary of Health and Human Services will issue regulations with respect to such payments prior to October 1, 1981. GAO understands that the need for the study is to resolve the longstanding issue of the appropriate basis for payments to hospitals for the costs of routine nursing care to Medicare beneficiaries. However, the study would require extensive onsite work sampling followed by an analysis of the data acquired to determine the extent to which differential payment may be justified. This effort would require approximately 300 people for about a 3-month period at a cost of about $4 million. If adequate resources are available, the study could be completed by April 1, l981. However, the study would be a major undertaking. GAO believes the task could be accomplished more economically and effectively with contract assistance under GAO direct supervision rather than with GAO professional staff. Unless they are provided with additional resources, GAO does not believe it can carry out the study. Whether such funding should be provided through GAO appropriation or otherwise is a matter for congressional consideration.
