Statement of Leslie G. Aronovitz, Director,
Health Care - Program Administration and Integrity Issues

In fiscal year 2000, Medicare made payments of over $220 billion to hundreds of thousands of providers who delivered services to nearly 40 million beneficiaries. Because of Medicare's vast size and complex structure, in 1990 we designated it as a high-risk program that is, at risk of considerable losses to waste, fraud, abuse, and mismanagement and it remains so today. Since that time, we have consistently reported on the efforts of the Health Care Financing Administration (HCFA), recently renamed the Centers for Medicare and Medicaid Services (CMS),  to safeguard Medicare payments and streamline operations.

Each year improper payments cost Medicare billions of dollars. Therefore, the process of enforcing program payment rules is critical to the viability of the program. My remarks today will focus on the importance of performing activities to protect the integrity of Medicare, while striking a balance of simplicity and responsiveness to the providers that bill the program. My comments are based on our previous and ongoing work and published reports by others.

In brief, at the heart of effectively administering Medicare is CMS responsibility for protecting the integrity of the program while, at the same time, ensuring that providers are treated fairly. CMS relies on its claims administration contractors to administer Medicare and interact with all of its stakeholders including providers. As CMS contractors and others have become more aggressive in identifying and pursuing inappropriate payments, providers have expressed concern that Medicare has become too complex and difficult to navigate. Although CMS monitors the effectiveness of contractors program management and safeguard activities, the agency's oversight of its contractors has historically been weak. In the last 2 years, however, the agency has made substantial progress. Our ongoing work has identified several areas in which CMS still needs improvement especially in ensuring that contractors are providing accurate, complete, and timely information to providers about Medicare billing rules and coverage policies.