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MWD-76-87 1 (1976-03-01)

handle is hein.gao/gaobaauyt0001 and id is 1 raw text is: t~. .. 7 i~1. 4g5~ B-164031(4) The Honorable Ja RESTRICTED - Not to be releasednwtsidem;fh6W ° Account'ng Office except on the basis affspeCifP--Vf-- by the Office of Congressional Relations.; ------------------- RELEASED ck Brooks, Chairman House of Representatives Dear Mr. Chairman: '~J As you requested on May 12, 1975, we compared the cost of having Medicare part B claims processed by contractors (carriers) which subcontract data processing with the cost of processing by those which do not. The enclosure to your letter showed that $139,587,441 apparently could have been saved in fiscal year 1974 if all Medicare carriers had subcontracted the data processing related to their claims. This savings involved $7,118,650 in administrative costs and $132,468,791 in benefit payments. Our analysis does not show that such savings would have been possible. We did not request formal comments on our findings from the Department of Health, Education, and Welfare. However, we have discussed our findings with representatives of the Social Security Administration and have incorporated their comments where appropriate. COMPARATIVE ADMINISTRATIVE COSTS On the basis of discussions with Social Security Admin- istration officials, we classified Medicare carriers into four categories: (1) carriers which subcontract with Elec- trornic Data Systems, Inc., (2) carriers which subcontract with other private firms, (3) carriers which do their own processing using the Model System which was developed pri- marily by the Social Security Administration, and (4) car- riers which do their own data processing using all other systems. Cost and other statistics for the Medicare carriers were based on the Social Security Administration's fiscal year 1975 Analysis of Intermediaries' and Carriers' Admin- istrative Costs as shown below. Nonrecurring costs were not included. MWD-76-87 fJ~7HN COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON, D.r, 20548 6~

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