In the most thorough type of manual claims review, a carrier’s clinically  trained personnel perform a medical review, which involves an  examination of the claim along with the patient’s medical record,  submitted by the physician, to determine compliance with all billing  requirements. Few Physician Practices and Few Claims Per Practice Receive Medical Reviews

In estimating the prevalence of medical reviews, data from the three  carriers in our study show that more than 90 percent of physician  practices—including individual physicians, groups, and clinics—did not  have any of their claims selected for medical review in fiscal year 2001,  and for those that did, relatively few claims were subject to review. Targeting Claims That Most Warrant Medical Review Could Be Improved

Although the carriers in our study were highly accurate in making payment  determinations, they can improve their process for selecting claims for  medical review that are most likely to contain billing errors. CMS Makes Claims Accuracy New Benchmark for Measuring Carrier Performance

Since 1996, the overall level of payment errors for the Medicare program  has been tracked nationwide in annual audit reports issued by the HHS  Office of Inspector General (OIG). CERT is designed to measure, for all  claims, the accuracy of payment decisions made by each carrier. The  CERT benchmark will allow CMS to hold the carriers accountable for the  accuracy of payment decisions for all claims processed, not just those  selected for review. Appendix III: Comments from the Centers for Medicare and Medicaid Services

Related GAO Products

Medicare: Communications With Physicians Can Be Improved   (GAO-02-249, February 27, 2002).
Why GAO Did This Study

In 1990, GAO designated the Medicare program to be at high-risk for waste, fraud, and abuse. More than a decade later, Medicare remains on GAO's high-risk list. This report examines Medicare's claims review process, which is designed to detect improper billing or payments.

What GAO Found

GAO found that most physicians who bill Medicare are largely unaffected by carriers' medical reviews, with 90 percent of physician claims going unreviewed in fiscal year 2001. At the three carriers GAO studied, implementation of the progressive corrective action initiative has reduced medical reviews of claims and has increased carrier education to individual physicians. The carriers in the study generally made appropriate payment determinations in examining physician claims selected for a medical review. By targeting claims that are more likely to have errors, carriers could improve the efficiency of their own operations and reduce administrative demands on the small proportion of physician practices with claims selected for review. The Centers for Medicare and Medicaid Services (CMS) is refocusing its oversight of carrier performance in processing and reviewing claims. The agency intends to hold carriers accountable for the overall level of payment errors in all the claims they process, not just the ones they review. Consistent with this approach, CMS is developing a program in which an independent contractor determines the accuracy of claims processed and paid by each carrier using quantitative performance measures.