The General Accounting Office said yesterday that the government is overpaying hospitals by 4.3 percent for Medicare patients because of calculating errors it made when setting up the new prospective payment system in 1983.
The overpayments will total $940 million in fiscal 1986 and $8 billion from 1986 to 1990, the GAO said.
The GAO report said that in computing 1981 average costs for hospital stays -- the numbers used to establish payment amounts -- the Department of Health and Human Services made two serious errors.
One was using unaudited hospital cost reports for 1981 that included items for which Medicare was not supposed to make reimbursements. As a result, the GAO found after a review of costs at 418 hospitals that average costs per patient should have been 2.98 percent lower.
The second HHS error the GAO cited was incorrect inclusion of reimbursements to hospitals for their capital costs in the 1981 average. The prospective payment system does not include such reimbursements, which are paid for separately, the GAO reported. That increased the error by another 1.29 percent, so overall the rates were set 4.3 percent too high.
HHS, in a reply to the GAO, said that Social Security amendments of 1983 directed the department to use the most recent Medicare average cost reports. The latest turned out to be unaudited 1981 reports, so HHS said it was complying with the law. HHS also said the GAO had overestimated potential overpayments.
In a related action, the House Ways and Means health subcommittee voted changes in the Medicare system this week that are designed to reduce net outlays by $10.5 billion over the next three years. They included:
*A 1 percent increase in Medicare payment rates for hospitals for 1986. The vote rejected an administration request for no increase, but provided less than the 2.1 percent increase proposed by a special commission set up in the 1983 law.
*A further 1-year freeze on Medicare payments to doctors who do not agree to accept the Medicare-set fee as the full fee. Doctors who do agree would get an increase to cover inflation.
*Beginning Oct. 1, 1986, abolition of Medicare payments to reimburse hospitals for capital costs of inpatient services.
*A small rise in 1986 in the current $15.50 Medicare premium for insurance on doctors -- but to less than the $16.10 a month now projected -- and then a freeze from 1986 to 1988. To make up the money lost from the freeze, a special new premium would be charged to Medicare beneficiaries with incomes over $20,000 for individuals or $40,000 for couples. This would be the first time Medicare has based benefits on ability to pay.
*Prohibitions against hospitals refusing to treat emergency patients they fear cannot pay or "dumping" the patients into other institutions.
*Extension of Medicare eligibility and the Medicare portion of the Social Security tax to all newly hired state and local government employes.
*A requirement that businesses permit widows, children and divorced spouses of their employes or deceased workers to buy into company health plans.