GAO Report: CMS Needs to Improve Payment Contractors Oversight

A July Government Accountability Office (GAO) report identified deficiencies in the Centers for Medicare & Medicaid’s Services (CMS) oversight of Medicare audit contractors. The GAO Report further bolstered the long standing provider concerns about the auditing process.

Partly in response to provider complaints about duplicative claim reviews, GAO Report evaluated CMS’ oversight of the following Medicare contractors:

  1. Medicare Administrative Contractors (MACs) — process and pay claims and also recoup overpayments and remediate underpayments;
  2. Zone Program Integrity Contractors (ZPICs) — investigate potential fraud;
  3. Recovery Auditors (RAs) (formerly known as RACs) — identify improper payments not previously reviewed by other contractors. RAs, unlike the other three contractors, are paid on a percentage of recovery rather than from appropriated funds; and
  4. Comprehensive Error Rate Testing (CERT) contractors — conducts post payment review of contractors to annually estimate Medicare’s improper payment rate.

The GAO Report found that CMS’s database, the Recovery Audit Data Warehouse, put in place to avoid RA duplication of post-payment reviews conducted by other contractors, did not provide information on all duplications. Furthermore, due to inconsistencies among other contractors in how and what claims data was entered, the database, according to the GAO Report, contained unreliable claims information. The GAO Report also found that “CMS has not monitored contractors’ data entry into the Recovery Audit Data Warehouse to ensure that it is complete and correct.”

For example, to avoid RAs from duplicating claim reviews, “MACs, ZPICs, the CERT contractor, and other entities can enter the claims they have reviewed into the Recovery Audit Data Warehouse and the database stores them as excluded claims (or exclusions),” explained the GAO Report. However, “five of the six ZPICs had not entered any claims into the Recovery Audit Data Warehouse as exclusions in 2012, although these ZPICs had performed postpayment claims reviews.”

Furthermore, echoing some of the complaints providers have expressed about post-payment Medicare contractors over the years, the GAO report found that “CMS also has not issued complete guidance for MACs and ZPICs on whether it is appropriate for them to conduct duplicative reviews.”  For example, the GAO Report found that “[i]n the absence of complete guidance, officials from CMS and representatives from a ZPIC and MAC differed in their understanding of whether ZPICs could conduct duplicative reviews.”

The GAO Report also found inconsistent, incomplete and/or unclear provider post-payment communication concerning providers’ rights “which could affect providers’ ability to exercise their rights.”

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