Government overpays Medicare HMOs, study finds. (health maintenance organizations)

WASHINGTON - The federal government may be overpaying the managed-care industry as much as $2 billion a year for Medicare patients.

Because of the accounting methods devised by the Health Care Financing Administration (HCFA), the agency in charge of Medicare payments, the managed-care industry has been steadily overpaid during the past three years, according to a General Accounting Office report. The dollar amount of this overpayment is growing by millions with each passing month, according to the government watchdog agency.

Excess payments to the managed-care industry in California alone accounted for more than $1 billion during fiscal 1995, GAO said. The state …