Commercial claims auditing software

This criticism comes on the heels of another GAO report critical of HCFA's initial decision — now revised — not to use already developed commercial auditing software to identify inappropriate physician coding claims. Reversing its stance, HCFA plans within a year to contract for and install commercial claims-auditing software designed to identify incorrect physician codes. HCFA anticipates that the change will save $465 million annually in Medicare overpayments.

HCFA initially rejected the idea of purchasing commercial software because officials thought the agency could develop similar software cheaper in-house. That was a "flawed idea" from the beginning, according to the GAO, considering that after six years of trying, HCFA was still not able to develop similar software.

Meanwhile, HCFA's concern about being forced to disclose claims-auditing edits and computer logic used by an agency vendor is also unfounded, the GAO argues.