Medicare: Methodology to Identify and Measure Improper Payments in the Medicare Program Does Not Include All Fraud Page: 2 of 3
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The methodology was a significant step toward quantifying Medicare improper payments.
Its primary purpose was to provide users of HCFA's financial statements with an estimate of
Medicare fee-for-service claims that were paid in error. It was not designed to identify or
measure the full extent of levels of fraud and abuse in the Medicare program. The HHS OIG
testified3 that the estimate of improper payments did not take into consideration numerous
kinds of outright fraud such as "phony records" or kickback schemes.4 The methodology
assumes that all medical records received for review represent actual services provided.
In response to the increased focus resulting from the HHS OIG's efforts in this area, HCFA
is developing plans to enhance its efforts to identify or measure Medicare improper
payments. We are currently reviewing these plans and will report to you separately on them.
We are sending copies of this letter to Representative John M. Spratt, Ranking Minority
Member of the House Committee on the Budget; interested congressional committees; the
Honorable Donna E. Shalala, Secretary, and the Honorable June Gibbs Brown, Inspector
General, Department of Health and Human Services; and the Honorable Nancy-Ann Min De
Parle, Administrator, Health Care Financing Administration.
Please contact me at (202) 512-4476 or by e-mail at iarmong.aimd@gao.gov if you or your
staff have any questions concerning this letter. Key contributors to this letter were
Deborah A. Taylor and James A. Kernen.
Sincerely yours,
Gloria L. Jarmon
Director, Health, Education, and Human Services
Accounting and Financial Management Issues
(916330)
3July 17, 1997, testimony of the HHS Inspector General in a hearing before the House Committee on
Ways and Means, Subcommittee on Health, entitled Audit of HCFA Financial Statements.
'The Anti-Kickback Act of 1986, 41 U.S.C. sections 51-58, makes it a criminal offense to knowingly and
willfully offer, provide, solicit, or accept any remuneration for the purpose of improperly obtaining or
rewarding favorable treatment in connection with a contract or a subcontract for supplies or services
charged to the United States, including supplies or services reimbursable by federal health care
programs such as Medicare.GAO/AIMD-00-69R Efforts to Measure Medicare Fraud
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United States. General Accounting Office. Medicare: Methodology to Identify and Measure Improper Payments in the Medicare Program Does Not Include All Fraud, text, February 4, 2000; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc295869/m1/2/: accessed April 24, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.