GAO recommends cost savings for Medicaid, Medicare

Federal auditors outlined billions of dollars in potential savings to Medicare and Medicaid programs during a House Energy and Commerce oversight subcommittee hearing on May 9.

The Dept. of Health and Human Services, which is projected to spend $864 billion in 2012, has acted on recommendations from the Government Accountability Office to cut waste and improper payments in the past. However, the department has yet to act on several proposals addressing vulnerabilities in program integrity and enhancing payment safeguard mechanisms, GAO officials said in a May report.

“At an agency as large as HHS, opportunities are ripe for wasteful and duplicative spending,” said Rep. Cliff Stearns (R, Fla.), the subcommittee’s chair. “It is clear HHS has a long way to go to streamline its many multibillion-dollar programs and restore trust in its management of our tax dollars.”

The GAO recommended that the Centers for Medicare & Medicaid Services use automatic prepayment controls to identify improper claims for medical equipment and supplies and expand regulations to revoke billing privileges for home health agencies with improper billing practices. Canceling a Medicare Advantage project to improve care quality, a bonus program that rewards more lower-performing plans than plans with high quality scores, would save $8 billion.

For Medicaid, the GAO called on CMS to adopt transparency requirements and use a strategy that ensures that supplemental payments to facilities have been reviewed by the agency. For instance, Medicaid payments to nondisproportionate share hospitals have increased from $6.3 billion to $14 billion between 2006 and 2010, but measures reporting required for the supplemental payments is incomplete.

Note: This item originally appeared at http://www.ama-assn.org/amednews/2012/05/21/gvbf0521.htm.