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HRD-82-39 1 (1982-02-18)

handle is hein.gao/gaobabcwy0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 HUMAN RESOURCKS DIVISION B-206363 FEBRUARY 18, 1982 The Honorable Richard S. Schweiker The Secretary of Health and lIiii 111111 Human Services 117526 Dear Mr. Secretary: Subject: Medicare Equalization Factor Payments to Group Practice Prepayment Plans Should Be Stopped (HRD-82-39) This letter is to advise you of our view that Medicare part B equalization factor payments to Group Practice Prepayment Plans (GPPPs), l/ which represent payments in excess of incurred costs made supposedly for future capital needs, are not consist- ent with either the statutory definition of reasonable cost under section 1861(v) of the Social Security Act or Department of Health and Human Services (HHS) implementing regulations. We are bringing this to your attention because (1) over 6 years has elapsed since the Health Care Financing Administration (HCFA) was first advised of this matter by the HHS Office of General Counsel and (2) although a notice of proposed rulemaking to dis- continue these payments was published in October 1980, there is no assurance that the payments will be terminated. We met with HCFA officials on November 3, 1981, to discuss this matter and suggested that they expedite issuing the final regulations to terminate the subject payments. However, the draft regulations were still under review within HCFA as of January 26, 1982, although agency records indicate that imple- menting them would save an estimated $9.4 million in fiscal year 1982. The regulations also conform other aspects of Medicare reasonable cost reimbursement for GPPPs to those for cost-based Health Maintenance Organizations (HMOs). 1/For Medicare purposes, a GPPP is an organization that has a formal arrangement with the equivalent of three or more full- time physicians to provide certain health services, generally not on a fee-for-service basis, to the plan's members. The members have contributed in advance toward the cost of the services through payments of premiums or dues (or such pay- ments have been made on their behalf). (106206)

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