GAO says Medicare program unsustainable in its present form

From: CCH /Aspen Publishers

GAO says Medicare program unsustainable in its present form Medicare continues to be a high risk program because of its size, and its vulnerability to making improper payments to suppliers and providers according to the Government Accountability Office (GAO). Medicare in its current form is unsustainable and will need to be changed to achieve efficiency and savings in the program, said the GAO report.

Issues and challenges

Medicare must improve management of its various programs and increase oversight of patient care and safety. In 2010 the Medicare program insured 47 million beneficiaries and had expenses of approximately $509 billion. CMS estimated that for fiscal year (FY) 2010 Medicare made improper payments that totaled approximately $48 billion. CMS has implemented payment reforms to the Medicare Advantage program and inpatient hospitals and other services to make payments more efficient, the GAO reported, and CMS has also increased feedback given to physicians regarding their resource usage so that physicians can recognize efficiencies when services are furnished together.

CMS recognizes that it has not tapped the services where it could recoup the greatest savings, such as oxygen and imaging services, according to the GAO. However, CMS has made some improvements under the durable medical equipment prosthetics, orthotics and supplies (DMEPOS) competitive bidding program and its transfer of fee-for-service claims to Medicare Administrative Contractors.

The GAO reported CMS still needs to address many issues such as: (1) the roles and responsibilities of certain contractor oversight responsibilities; (2) clearing a backlog of contracts that must be closed out; (3) finishing a 2007 investigation of $70 million in questionable payments; (4) developing a process to address vulnerabilities regarding improper payments identified by recovery audit contractors; (5) postpayment reviews of claims submitted by home health agencies with high rates of improper billing; (5) oversight regarding patient care and safety and the quality of care provided by nursing homes; (6) ineffective funding of state surveys for facilities participating in Medicare; (7) the improvement of controls over contracts; and (8) developing effective implementation of recent laws to reduce improper payments. GAO Report, GAO-11-430T, March 2, 2011, ¶68,017

Editor’s Note: GAO Testimony attached below.