Improper Payments
Reported Medicare Estimates and Key Remediation Strategies Gao ID: GAO-11-842T July 28, 2011In Process
For fiscal year 2010, HHS reported an estimate of almost $48 billion in Medicare improper payments, representing about 38 percent of the total $125.4 billion estimate for the federal government. However, this Medicare improper payment estimate is incomplete because HHS has yet to develop a comprehensive estimate for the Medicare prescription drug benefit. The improper payment estimate includes both overpayments and underpayments. Causes cited include inadequate documentation, medically unnecessary services, coding errors, and payment calculation errors. It is important to recognize that the $48 billion is not an estimate of fraud in Medicare. Because the improper payment estimation process is not designed to detect or measure the amount of fraud that may exist, there may be fraud that is not reflected in HHS's reported estimate. CMS faces challenges in designing and implementing internal controls to effectively prevent or detect and recoup improper payments. In 2010, CMS established the Center for Program Integrity to serve as its focal point for all national Medicare program integrity issues. Based on past work, GAO identified five key strategies to help reduce fraud, waste, and abuse and improper payments in Medicare, which CMS has reported initiating actions to address. GAO has made recommendations to strengthen CMS's implementation of these strategies, some of which the agency has not implemented. (1) Strengthen provider enrollment standards and procedures. Strong standards and procedures can help reduce the risk of enrolling providers intent on defrauding the program. CMS has taken action to implement provisions of the Patient Protection and Affordable Care Act by screening providers by levels of risk and providing more stringent review of high-risk providers, but has yet to implement certain GAO recommendations in this area. (2) Improve prepayment reviews. Prepayment reviews of claims help ensure that Medicare pays correctly the first time. According to CMS, as of July 1, 2011, CMS has begun applying predictive modeling analysis to claims and plans to expand Medicare prepayment controls. CMS has not implemented GAO's recommendation to improve prepayment reviews. (3) Focus postpayment reviews on vulnerable areas. Postpayment reviews are critical to identifying payment errors and recouping overpayments. In March 2009, CMS began instituting a national recovery audit contractor (RAC) program to help the agency supplement its postpayment reviews. CMS has also developed information technology to help it better identify claims paid in error, but GAO recently reported that the systems are not being used to the extent originally planned and made several recommendations to address the issues. (4) Improve oversight of contractors. CMS has taken action to improve oversight of prescription drug plan sponsors' fraud and abuse programs, which addresses GAO's recommendation, but is still developing specific performance statistics. (5) Develop a robust process to address identified vulnerabilities. Having mechanisms in place to resolve vulnerabilities that lead to improper payments is critical. While CMS has begun actions in this area, it has not developed a robust corrective action process for vulnerabilities identified by Medicare RACs as GAO recommended.
GAO-11-842T, Improper Payments: Reported Medicare Estimates and Key Remediation Strategies
This is the accessible text file for GAO report number GAO-11-842T
entitled 'Improper Payments: Reported Medicare Estimates and Key
Remediation Strategies' which was released on July 28, 2011.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as
part of a longer term project to improve GAO products' accessibility.
Every attempt has been made to maintain the structural and data
integrity of the original printed product. Accessibility features,
such as text descriptions of tables, consecutively numbered footnotes
placed at the end of the file, and the text of agency comment letters,
are provided but may not exactly duplicate the presentation or format
of the printed version. The portable document format (PDF) file is an
exact electronic replica of the printed version. We welcome your
feedback. Please E-mail your comments regarding the contents or
accessibility features of this document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
United States Government Accountability Office:
GAO:
Testimony before the Subcommittee on Government Organization,
Efficiency and Financial Management, Committee on Oversight and
Government Reform, House of Representatives:
For Release on Delivery:
Expected at 10:30 a.m. EDT:
Thursday, July 28, 2011:
Improper Payments:
Reported Medicare Estimates and Key Remediation Strategies:
Statement of Kay L. Daly:
Director, Financial Management and Assurance:
Kathleen M. King:
Director, Health Care:
GAO-11-842T:
GAO Highlights:
Highlights of GAO-11-842T, a testimony before the Subcommittee on
Government Organization, Efficiency and Financial Management,
Committee on Oversight and Government Reform, House of Representatives.
Why GAO Did This Study:
GAO has designated Medicare as a high-risk program because of its
size, complexity, and susceptibility to improper payments. In 2010,
Medicare covered 47 million elderly and disabled beneficiaries and had
estimated outlays of $516 billion. The Centers for Medicare & Medicaid
Services (CMS) is the agency in the Department of Health and Human
Services (HHS) responsible for administering the Medicare program and
leading efforts to reduce Medicare improper payments.
This testimony focuses on estimated improper payments in the Medicare
program for fiscal year 2010 and the status of CMS‘s efforts to
implement key strategies to help reduce improper payments. This
testimony is primarily based on previous GAO reporting related to
governmentwide improper payments, Medicare high-risk challenges and
program integrity efforts, and CMS‘s information technology systems
intended to identify improper payments. GAO supplemented that prior
work with additional information on the nature and extent of Medicare
improper payments reported by HHS in its fiscal year 2010 agency
financial report. GAO also received updated information from CMS in
February 2011 and, in select cases, as of July 2011, on its actions
related to relevant laws, regulations, guidance, and open
recommendations pertaining to key remediation strategies.
What GAO Found:
For fiscal year 2010, HHS reported an estimate of almost $48 billion
in Medicare improper payments, representing about 38 percent of the
total $125.4 billion estimate for the federal government. However,
this Medicare improper payment estimate is incomplete because HHS has
yet to develop a comprehensive estimate for the Medicare prescription
drug benefit. The improper payment estimate includes both overpayments
and underpayments. Causes cited include inadequate documentation,
medically unnecessary services, coding errors, and payment calculation
errors. It is important to recognize that the $48 billion is not an
estimate of fraud in Medicare. Because the improper payment estimation
process is not designed to detect or measure the amount of fraud that
may exist, there may be fraud that is not reflected in HHS‘s reported
estimate.
CMS faces challenges in designing and implementing internal controls
to effectively prevent or detect and recoup improper payments. In
2010, CMS established the Center for Program Integrity to serve as its
focal point for all national Medicare program integrity issues. Based
on past work, GAO identified five key strategies to help reduce fraud,
waste, and abuse and improper payments in Medicare, which CMS has
reported initiating actions to address. GAO has made recommendations
to strengthen CMS‘s implementation of these strategies, some of which
the agency has not implemented.
Strengthen provider enrollment standards and procedures. Strong
standards and procedures can help reduce the risk of enrolling
providers intent on defrauding the program. CMS has taken action to
implement provisions of the Patient Protection and Affordable Care Act
by screening providers by levels of risk and providing more stringent
review of high-risk providers, but has yet to implement certain GAO
recommendations in this area.
Improve prepayment reviews. Prepayment reviews of claims help ensure
that Medicare pays correctly the first time. According to CMS, as of
July 1, 2011, CMS has begun applying predictive modeling analysis to
claims and plans to expand Medicare prepayment controls. CMS has not
implemented GAO‘s recommendation to improve prepayment reviews.
Focus postpayment reviews on vulnerable areas. Postpayment reviews are
critical to identifying payment errors and recouping overpayments. In
March 2009, CMS began instituting a national recovery audit contractor
(RAC) program to help the agency supplement its postpayment reviews.
CMS has also developed information technology to help it better
identify claims paid in error, but GAO recently reported that the
systems are not being used to the extent originally planned and made
several recommendations to address the issues.
Improve oversight of contractors. CMS has taken action to improve
oversight of prescription drug plan sponsors‘ fraud and abuse
programs, which addresses GAO‘s recommendation, but is still
developing specific performance statistics.
Develop a robust process to address identified vulnerabilities. Having
mechanisms in place to resolve vulnerabilities that lead to improper
payments is critical. While CMS has begun actions in this area, it has
not developed a robust corrective action process for vulnerabilities
identified by Medicare RACs as GAO recommended.
View [hyperlink, http://www.gao.gov/products/GAO-11-842T] or key
components. For more information, contact Kay L. Daly at (202) 512-
9312 or dalykl@gao.gov or Kathleen M. King at (202) 512-7114 or
kingk@gao.gov.
[End of section]
Chairman Platts, Ranking Member Towns, and Members of the Subcommittee:
Thank you for the opportunity to be here today to discuss improper
payments in the Medicare program, as well as the Centers for Medicare
& Medicaid Services' (CMS) efforts to remediate them. In 2010,
Medicare covered 47 million elderly and disabled beneficiaries and had
estimated outlays of $516 billion, making it one of the largest
federal programs. Medicare consists of four parts: A, B, C, and D.
Medicare Parts A and B are known as Medicare fee-for-service. Part A
covers hospital and other inpatient stays. Medicare Part B covers
hospital outpatient, physician, and other services. Part C is Medicare
Advantage, under which beneficiaries receive benefits through private
health plans. Part D is the Medicare outpatient prescription drug
benefit. CMS is the agency in the Department of Health and Human
Services (HHS) responsible for administering the Medicare program and
leading efforts to reduce Medicare improper payments.
GAO has designated Medicare as a high-risk program because of its
size, complexity, and susceptibility to improper payments.[Footnote 1]
As defined by the Improper Payments Elimination and Recovery Act of
2010 (IPERA), an improper payment is any payment that should not have
been made or that was made in an incorrect amount (including
overpayments and underpayments) under statutory, contractual,
administrative, or other legally applicable requirements.[Footnote 2]
For fiscal year 2010, federal agencies reported an estimated $125.4
billion in improper payments, of which Medicare accounts for nearly
$48 billion--the highest estimated amount of improper payments in a
single program. The Medicare improper payment estimates do not reflect
all of the program's risk because HHS did not report a total improper
payment estimated amount for its Medicare prescription drug benefit
program (Part D). Despite progress made by CMS, reducing improper
payments in the program is a continuing challenge for CMS due to the
size and scope of Medicare.
Fiscal year 2010 marked the 7th year of implementation of the Improper
Payments Information Act of 2002 (IPIA).[Footnote 3] IPIA requires
executive branch agencies to annually review all programs and
activities to identify those that are susceptible to significant
improper payments, estimate the annual amount of improper payments for
such programs and activities, and report these estimates along with
actions taken to reduce improper payments for programs with estimates
that exceed $10 million. IPERA, enacted July 22, 2010, amended IPIA by
expanding the previous requirements for identifying, estimating, and
reporting on programs and activities susceptible to significant
improper payments and expanding requirements for recovering
overpayments across a broad range of federal programs.[Footnote 4]
IPERA provisions generally became effective in fiscal year 2011. The
Office of Management and Budget (OMB) has since issued updated
guidance for federal agencies on reporting, reducing, and recovering
improper payments.[Footnote 5] In addition, the Patient Protection and
Affordable Care Act (PPACA),[Footnote 6] as amended by the Health Care
and Education Reconciliation Act of 2010,[Footnote 7] contains
provisions designed to help reduce improper payments in the Medicare
program. See appendix I for additional information about recent
congressional and executive branch actions related to Medicare
improper payments.
Today, my testimony will focus on two areas:
* HHS reported estimated improper payments in the Medicare program for
fiscal year 2010, and:
* the status of CMS's efforts to implement key strategies to help
remediate improper payments in the Medicare program.
My statement today is based primarily on previous GAO reporting
related to governmentwide improper payments, Medicare high-risk
challenges and program integrity efforts, and CMS's information
technology systems intended to help identify improper payments. We
supplemented that prior work with additional information on the nature
and extent of Medicare improper payments reported by HHS in its fiscal
year 2010 agency financial report (AFR). We also received updated
information from CMS in February 2011 and, in select cases, as of July
2011, on its actions related to relevant laws, regulations, guidance,
and open recommendations pertaining to the key remediation strategies
discussed later in this statement. A list of related GAO products is
included at the end of this statement. Our prior work was conducted in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Improper Payments in the Medicare Program:
HHS annually reports on improper payments in its AFR. For fiscal year
2010, HHS reported improper payment estimates for several programs,
including Medicare. Collectively, HHS reported an estimate of almost
$48 billion in improper payments in Medicare.[Footnote 8] The $48
billion in estimated improper payments reported for fiscal year 2010
is attributable to Medicare fee-for-service and Medicare Advantage.
[Footnote 9] As shown in figure 1, the Medicare program represents
about 38 percent of the $125.4 billion improper payment estimated
amount reported by 20 federal agencies covering 70 programs. Further,
Medicare's estimated improper payment amount is the highest among all
federal programs that reported an estimated amount.
Figure 1: Fiscal Year 2010 Estimated Improper Payment Reported Amounts
for Federal Programs:
[Refer to PDF for image: pie-chart]
Medicare Fee-for-Service: 27% ($34.3 billion);
Medicare Advantage: 11% ($13.6 billion);
Other federal programs: 62% ($77.5 billion).
Source: GAO summary of agency data.
[End of figure]
HHS's estimated amount of improper payments for Medicare is incomplete
because it has yet to report a comprehensive improper payment estimate
for the Medicare prescription drug benefit program, which had reported
outlays of about $59 billion in fiscal year 2010. However, HHS has
taken some steps to develop a comprehensive improper payment error
rate.[Footnote 10] Specifically, for fiscal year 2010, HHS calculated
error rates for the four components of the Medicare prescription drug
benefit program, with the estimates ranging from $45 million to $5.4
billion for each component. However, HHS reported that the four
estimates overlap and consequently cannot be totaled. HHS reported
that it expects to report a comprehensive estimate for the
prescription drug benefit program in fiscal year 2011.
It is important to recognize that the $48 billion in estimated
improper payments reported by HHS in fiscal year 2010 is not an
estimate of fraud in Medicare.[Footnote 11] Reported improper payment
estimates include many types of overpayments, underpayments, and
payments that were not adequately documented. In addition, because the
improper payment estimation process is not designed to detect or
measure the amount of fraud in Medicare, there may be fraud that
exists in the Medicare program that is not included in the reported
improper payment estimate.
In addition to inadequate documentation, HHS cited a number of other
causes for the estimated $48 billion in reported improper payments,
including the provision of services that were found not to be
medically necessary, coding errors, incorrect interpretation of data,
and payment calculation errors. HHS reported that its analysis showed
most Medicare fee-for-service improper payments were for medically
unnecessary durable medical equipment and inpatient hospital services.
For Medicare Advantage, HHS reported that the majority of the improper
payment estimate resulted from insufficient documentation to support
the diagnoses submitted by private health plans for payment.
CMS's methodology for estimating improper payments has evolved.
Beginning in 1996, HHS's Office of Inspector General (OIG) estimated
improper payments in the Medicare fee-for-service program as part of
its annual financial statement audit. In fiscal year 2003, CMS assumed
responsibility for estimating Medicare fee-for-service improper
payments and modified the methodology to improve error detection and
provide more detailed information on the errors. During fiscal year
2009, HHS revised its methodology for calculating the Medicare fee-for-
service improper payment error rate based on HHS OIG audit reports and
input from CMS advisory medical staff. According to HHS, the revised
methodology is more stringent. Using this revised methodology for a
limited number of claims reviewed in fiscal year 2009, HHS reported
estimated Medicare fee-for-service improper payments of $24.1 billion
in its fiscal year 2009 AFR, representing an error rate of 7.8
percent. However, HHS subsequently restated the fiscal year 2009
improper payment estimate for Medicare fee-for-service by applying the
results of the revised methodology to the entire year and reported a
revised estimate of $35.4 billion and an error rate of 12.4 percent.
CMS set key performance measures to reduce improper payments for
Medicare fee-for-service and Medicare Advantage. For fiscal year 2010,
HHS reported error rates of 10.5 percent and 14.1 percent for Medicare
fee-for-service and Medicare Advantage, respectively. HHS reported
that it met its improper payment error rate target for Medicare
Advantage in fiscal year 2010 by achieving a 14.1 percent error rate,
which was better than its goal of 14.3 percent. However, CMS was not
able to demonstrate sustained progress in reducing its Medicare fee-
for-service improper payment rate. As discussed previously, HHS
reported that it made changes to improve the estimation methodology,
which meant that previous estimates were not comparable to those HHS
made in fiscal year 2010. For fiscal year 2012, CMS reported that it
set improper payment reduction targets as part of the strategic plan
prepared under the Government Performance and Results Act of 1993.
[Footnote 12] The 2012 target error rates are 6.2 percent for Medicare
fee-for-service and 13.2 percent for Medicare Advantage.
Further, in response to Executive Order 13520,[Footnote 13] HHS
designated the Assistant Secretary for Financial Resources and Deputy
Administrator for Program Integrity at CMS as the accountable
officials responsible for efforts to reduce improper payments and
establish improper payment reduction targets for Medicare fee-for-
service and Medicare Advantage as shown in figure 2.
Figure 2: Reduction Targets for Medicare Fee-for-Service and Medicare
Advantage Improper Payments:
[Refer to PDF for image: vertical bar graph]
FY 2011:
Target rates for Medicare Fee-for-Service: 8.5%;
Target rates for Medicare Advantage (Part C): 13.7%.
FY 2012:
Target rates for Medicare Fee-for-Service: 6.2%;
Target rates for Medicare Advantage (Part C): 13.2%.
FY 2013:
Target rates for Medicare Fee-for-Service: 5.8%;
Target rates for Medicare Advantage (Part C): 12.9%.
Source: GAO analysis.
Note: Data are from [hyperlink, http://www.PaymentAccuracy.gov]
(accessed July 22, 2011). Executive Order 13520, Reducing Improper
Payments, required that the Secretary of the Treasury in coordination
with the Attorney General and OMB publish information regarding
improper payments on the Internet.
[End of figure]
In 2010, CMS created the Center for Program Integrity (CPI) to serve
as its focal point for all national Medicare program integrity issues.
CPI is responsible for addressing program vulnerabilities leading to
improper payments, including collaborating with other CMS components
to develop and implement a comprehensive strategic plan, objectives,
and measures to carry out the agency's program integrity mission and
goals. According to CMS documentation describing the program, CPI was
designed to promote Medicare integrity through the following
activities:
* conducting provider and contractor audits and policy reviews;
* identifying and monitoring program vulnerabilities;
* providing support and assistance to states;
* collaborating on the development and advancement of new legislative
initiatives and improvements to deter, reduce, and eliminate fraud,
waste, and abuse;
* overseeing all CMS interactions and collaboration with key
stakeholders related to program integrity (e.g., the Department of
Justice, HHS OIG, and state law enforcement agencies) for the purposes
of detecting, deterring, monitoring, and combating fraud and abuse;
and:
* taking action against those who commit or participate in fraudulent
or other unlawful activities.
Status of CMS's Efforts to Implement Key Strategies to Help Remediate
Improper Payments:
CMS has begun a number of initiatives related to the five strategies
identified in our previous reporting that are key to reducing Medicare
improper payments. However, CMS still faces significant challenges in
designing and implementing internal controls to effectively prevent or
detect and recoup improper payments and to prevent fraud, waste, and
abuse. In March 2011, we testified that effective implementation of
GAO recommendations, provisions in recently enacted laws, and recent
guidance related to five key strategies could help remediate fraud,
waste, abuse, and improper payments in the Medicare program.[Footnote
14] Figure 3 provides an overview of those key strategies.
Figure 3: Strategies to Help Reduce Improper Payments in the Medicare
Program:
[Refer to PDF for image: illustration]
* Strengthen provider enrollment;
* Improve prepayment reviews;
* Focus postpayment reviews on vulnerable areas;
* Improve oversight of contractors;
* Develop a robust process to address identified vulnerabilities.
Source: GAO.
[End of figure]
We testified in March 2011 that PPACA had a number of provisions that,
if effectively addressed, could aid CMS in its efforts to minimize
improper payments.[Footnote 15] Specifically, PPACA included
provisions related to strengthening provider enrollment and improving
contractor oversight. CMS had issued final rules implementing some of
these provisions. In addition, in June 2011, we reported on challenges
CMS has faced in implementing information technology systems to help
it identify potentially fraudulent or abusive claims that had been
paid.[Footnote 16]
The following sections provide an overview of CMS reported actions
related to each of the five strategies we identified in our prior
reporting as key to helping reduce Medicare improper payments. GAO has
made recommendations to strengthen CMS's actions to address these
strategies, some of which have not been implemented.
Strengthening provider enrollment standards and procedures.
As discussed in our March 2011 testimony,[Footnote 17] strengthening
the standards and procedures for provider enrollment could help reduce
the risk of enrolling providers intent on defrauding or abusing the
program. CMS has previously identified two types of providers whose
services and items are especially vulnerable to improper payments--
home health agencies (HHA) and suppliers of durable medical equipment,
prosthetics, orthotics, and supplies (DMEPOS). In our 2009 report on
HHAs, we found problems with the enrollment procedures--for example,
CMS's contractors were not requiring HHAs to resubmit enrollment
information (including information about key officials, operating
capital, and practice location) for reverification every 5 years as
required by CMS.[Footnote 18] CMS implemented one of the
recommendations from that report but did not implement a
recommendation to revoke billing privileges from HHAs engaged in a
pattern of improper billing practices. In a 2005 report on DMEPOS
suppliers, we found that CMS had not taken sufficient steps to prevent
entities intent on defrauding Medicare from enrolling, and we reported
that more effective screening and stronger enrollment standards were
needed to ensure that new suppliers were legitimate
businesses.[Footnote 19] Partly in response to our recommendation to
improve the provider enrollment process, CMS took steps to implement
new supplier quality standards as part of an accreditation rule issued
in August 2006 and proposed new supplier enrollment standards in
January 2008. It proposed that suppliers would be required to meet
these new accreditation standards in 2009. However, the new supplier
enrollment standards were not finalized until August 2010.
Several requirements in PPACA focus on strengthening provider
enrollment procedures, which could help prevent Medicare from making
improper payments and address some of our previous concerns and
recommendations. For example, PPACA requires the Secretary of HHS, in
consultation with the HHS OIG, to establish procedures for screening
providers enrolling in Medicare, including assessing the risk levels
of fraud, waste, and abuse by categories of providers. At a minimum,
PPACA requires all providers to be subject to licensure checks, which
may include checks across state lines. Further, PPACA provides for
enhanced oversight of new providers for specific periods of time and
of initial claims of DMEPOS suppliers. On February 2, 2011, CMS and
the HHS OIG published a final rule to implement these new screening
procedures.[Footnote 20] In addition, PPACA imposes specific
requirements for providers to disclose any current or previous
affiliation with a provider that has uncollected debt; has been or is
subject to a payment suspension under a federal health care program;
has been excluded from participation under Medicare, Medicaid, or the
Children's Health Insurance Program or has had its billing privileges
denied or revoked. The law allows CMS to deny enrollment to any such
provider whose previous affiliations pose an undue risk. In February
2011, CMS officials told us that they were drafting a proposed rule to
implement this authority. Further, providers that order home health
services must have a face-to-face encounter with the beneficiary
before the services can be ordered. CMS issued a final rule regarding
this requirement in November 2010. To reduce spending for durable
medical equipment and related supplies, the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 (MMA) required that
CMS phase in, with several rounds of bidding, a large scale
competitive bidding program for certain DMEPOS.[Footnote 21] CMS began
to implement a Medicare competitive bidding program for durable
medical equipment and supplies with prices that took effect in January
2011 from the first round of bidding. This program has the potential
to help reduce fraud, waste, and abuse because it requires CMS to
select DMEPOS suppliers based in part on new scrutiny of their
financial documents and other application materials, among other
things. PPACA required CMS to expedite implementation of the
competitive bidding program for durable medical equipment, expanding
the number of areas to be included in the second round of bidding from
70 to 91 by the end of 2011. CMS told us that it was working on round
2 of the competitive bidding program, which is anticipated to be
operational in summer 2013.
Improving prepayment review of claims.
Our prior reporting on Medicare found that prepayment reviews of
claims are essential to help ensure that Medicare pays correctly the
first time. Conducting these reviews is challenging due to the volume
of claims. Overall, less than 1 percent of Medicare's claims are
subject to a medical record review by trained contractor personnel.
Therefore, having robust automated payment controls--called edits--in
place to deny inappropriate claims or flag them for further review is
critical. However, in our 2007 report, we identified weaknesses in
these prepayment controls.[Footnote 22] For example, we found that
contractors responsible for reviewing DMEPOS claims did not have
automated prepayment controls in place to identify questionable
claims, such as those associated with atypically rapid increases in
billing or for items unlikely to be prescribed in the normal course of
medical care. Since then, CMS has added computer edits to flag claims
for services unlikely to be provided in the normal course of medical
care, but has not implemented our recommendation to have edits in
place based on thresholds for unexplained increases in billing.
If implemented, several recent legislative requirements and
administrative directives could help CMS with its prepayment review to
prevent improper payments. First, the Small Business Jobs Act of 2010
requires CMS to use predictive modeling and other analytic techniques--
known as predictive analytic technologies--both to identify and to
prevent improper payments under the Medicare fee-for-service program.
[Footnote 23] These predictive analytic technologies will be used to
analyze and identify Medicare provider networks, billing patterns, and
beneficiary utilization patterns and detect those that represent a
high risk of fraudulent activity. Through such analysis, unusual or
suspicious patterns or abnormalities could be identified that could be
used to prioritize additional review of suspicious transactions before
payment is made. CMS published a solicitation in December 2010 for
these technologies and a case management system to track findings. The
legislation provides that the solicitation require contractors that
are selected to begin using these technologies on July 1, 2011, in the
10 states identified by CMS as having the highest risk of fraud,
waste, or abuse in Medicare fee-for-service payments. After the
initial year, based on the results of the predictive analytic
technologies, CMS reported that it plans to expand their use to other
states beyond the 10 states identified as having the highest risk for
fraud, waste, and abuse. According to CMS, as of July 1, 2011, initial
predictive modeling has been used on claims prior to payment to
identify their level of risk for being improper and to focus
investigative efforts.
Second, a June 2010 presidential memorandum directed agencies to check
certain databases--known as the "Do Not Pay List"--before making
payments, to ensure that payments do not go to individuals who were
deceased or excluded from receiving federal payments or to entities
that had been excluded from receiving federal payments. As of July
2011, this governmentwide database was still under development.
However, CMS officials stated that, in response to the presidential
memorandum, the agency reviewed selected databases that it and its
Medicare contractors were using to determine payment eligibility for
providers and took action to ensure that the agency's method of
ensuring payment eligibility was consistent with the intent of the "Do
Not Pay List."
Focusing postpayment claims review on most vulnerable areas.
We previously reported that postpayment reviews are critical to
identifying payment errors to recoup overpayments in Medicare. CMS's
claims administration contractors conduct limited postpayment reviews.
Therefore, it is important that they target their postpayment review
resources on providers with a demonstrated high risk of improper
payments. Further, we previously reported that CMS could strengthen
postpayment home health claims review by focusing postpayment claims
review on the most vulnerable areas and increasing the amount of
postpayment review by using recovery audit contractors (RAC) for the
Medicare program. CMS has not acted to implement our recommendation
about focusing postpayment home health claims review based on high
rates of improper billing identified through prepayment reviews. CMS
has had efforts focusing on postpayment review of claims, most
recently its national RAC program, begun in March 2009, after
completion of a 3-year demonstration program in 2008.[Footnote 24] The
national program was designed to help the agency supplement the
postpayment reviews conducted by contractors other than RACs. The RACs
review fee-for-service claims after payment, but because RACs are paid
a contingent fee based on the dollar value of the improper payments
identified, they have focused on claims from inpatient hospital stays,
which are generally more costly services. PPACA expanded Medicare's
RAC program to Medicare Advantage and the prescription drug benefit
program. CMS published a request for comments on the development of
RACs for those programs in December 2010. CMS awarded a Medicare
prescription drug benefit RAC task order for a 1-year base period that
began January 2011 and included 4 option years.
In June 2011, we reported that CMS has also developed information
technology to help it better identify claims paid in error, but the
systems are not being used to the extent originally planned, and CMS
has not measured whether they have helped in reducing payment errors.
[Footnote 25] To integrate claims information and improve its ability
to identify fraud, waste, and abuse, CMS initiated two information
technology system programs in 2006: the Integrated Data Repository
(IDR)[Footnote 26] and One Program Integrity (One PI) to centralize
and make more accessible the data needed to conduct these analyses.
The IDR was intended to provide a central source of data related to
Medicare and Medicaid claims, and the One PI system is a web-based
portal and suite of analytical software tools to be used to extract
data from IDR and enable complex analyses of these data.
As we reported in June 2011, although CMS has developed and
implemented IDR and One PI for use by its program integrity analysts,
IDR did not include all the data the agency planned to have
incorporated by the end of 2010.[Footnote 27] For example, IDR
includes most types of Medicare claims data, but did not include data
from other CMS systems that are needed to help analysts identify
improper payments. According to IDR program officials, these data were
not incorporated into IDR because funding for the development of the
software and acquisition of the hardware needed to meet this
requirement was not approved until the summer of 2010. Since then, IDR
program officials have developed project plans and identified users'
requirements, and plan to incorporate these additional data by
November 2011.
In addition, CMS has developed and deployed One PI, but the system has
been used by a limited number of analysts--less than 7 percent of the
intended user community--and did not yet provide as many tools as
planned. According to agency officials, plans to train and deploy the
system to a broad community of users were disrupted when resources
dedicated to these activities were redirected to address a need to
improve the user training program. Further, as of June 2011, plans and
schedules for completing the remaining work had not been finalized,
and CMS had not identified risks and obstacles to project schedules
that may affect its ability to ensure broad use and full
implementation of the systems. Consequently, the agency may miss an
opportunity to effectively use these information technology solutions
to enhance its ability to detect fraud, waste, and abuse in the
Medicare program. In our June 2011 report, we made seven
recommendations to help ensure that the development and implementation
of IDR and One PI help CMS meet its program integrity goals and
objectives.[Footnote 28] CMS concurred with GAO's recommendations and
agreed to act upon them.
Improving oversight of contractors.
As called for in our Standards for Internal Control in the Federal
Government,[Footnote 29] monitoring the activities used by an
organization to address improper payments should be performed
continually and should be ingrained in the entity's operations. Over
the years, we have found areas where CMS's oversight of contractor
activities that provide services to Medicare beneficiaries had been
insufficient to ensure that required program control activities were
conducted and working well. For example, all Part D drug-plan sponsors
are required to have programs to prevent, detect, and correct fraud,
waste, and abuse--also referred to as fraud and abuse programs. CMS is
responsible for ensuring that sponsors are in compliance with this
requirement. However, in 2008 we found that CMS's oversight of these
programs was limited.[Footnote 30] We recommended that CMS conduct
timely audits of sponsors' fraud and abuse programs. CMS agreed with
this recommendation. In March 2010, we reported that CMS had completed
desk audits of selected sponsors' programs and was beginning to
implement an expanded oversight strategy, including on-site audits to
assess the effectiveness of these programs more thoroughly.[Footnote
31] In November 2010, CMS officials reported that the agency had
conducted on-site audits of 33 of the 290 sponsors in 2010 covering 62
percent of the enrolled beneficiaries in 2010, which addresses our
recommendation. As a result of the on-site audits, CMS had taken
formal enforcement actions against several sponsors. In addition, CMS
published a final rule in April 2010 to increase its oversight efforts
and ensure that sponsors have effective programs in place.[Footnote
32] PPACA included provisions for CMS to evaluate contractors
receiving Medicare Integrity Program and Medicaid Integrity Program
funding every 3 years. In addition, PPACA requires these contractors
to provide performance statistics to HHS and its OIG upon request. In
February 2011, CMS officials told us that they were taking action to
implement these requirements for Medicare. At that time, officials
told us that CMS was tracking performance statistics and adding to and
refining these statistics and was also developing the specific
performance statistics for its Part D integrity contractors and
expected to finalize these statistics this year.
Developing a robust process for addressing identified vulnerabilities.
Having mechanisms in place to resolve vulnerabilities that lead to
improper payments is key to effective program management. But our work
has shown that CMS has not developed a robust process to specifically
address identified vulnerabilities that lead to improper payments in
Medicare. We have reported that an agency should have policies and
procedures to ensure that (1) the findings of all audits and reviews
are promptly evaluated, (2) decisions are made about the appropriate
response to these findings, and (3) actions are taken to correct or
resolve the issues promptly.[Footnote 33] We have also stressed the
importance of holding individuals accountable for achieving agency
objectives. However, as we reported in March 2010, CMS had not
established an adequate process during its recovery audit contracting
demonstration or in planning for the subsequent recovery audit
national program to ensure prompt resolution of identified improper
payment vulnerabilities in Medicare.[Footnote 34] During the
demonstration, CMS did not assign responsibility to agency officials
or contractors for taking corrective action. According to CMS
officials, the agency took corrective action only for vulnerabilities
with national implications, and let the contractors that processed and
paid claims decide whether to take action for vulnerabilities that
might occur only in certain geographic areas. Additionally, we
reported that during the demonstration CMS did not specify in a plan
what type of corrective action was required or establish a time frame
for corrective action. We also found that the lack of documented
responsibility assignments impeded CMS's efforts to promptly resolve
the vulnerabilities identified during the demonstration.
For the national Medicare RAC program, although CMS established a
corrective action team to compile, review, and categorize identified
vulnerabilities and discuss corrective action recommendations, the
corrective action process was still incomplete. CMS appointed the
Director of the Office of Financial Management to be responsible for
the day-to-day operations of the program, and the CMS Administrator to
be responsible for vulnerabilities that span agency components.
However, the corrective action process did not include any steps to
either assess the effectiveness of the corrective actions taken or
adjust them as necessary based on the results of the assessments.
Further, the agency had not developed time frames for implementing
corrective actions. Because of these weaknesses, we recommended that
CMS develop and implement a corrective action process that includes
policies and procedures to ensure that the agency promptly (1)
evaluates findings of RAC audits, (2) decides on the appropriate
response and a time frame for taking action based on established
criteria, and (3) acts to correct the vulnerabilities
identified.[Footnote 35] CMS concurred with this recommendation.
Agency officials said they intended to review vulnerabilities on a
case-by-case basis and were considering assigning them to risk
categories to help prioritize their actions. In February 2011, CMS
reported that the agency was still working to address the
vulnerabilities identified during the demonstration program. Specific
to corrective actions, CMS officials told us that its contractors were
required to consider and evaluate vulnerabilities identified by
various entities, including the RACs. However, as of March 2011, CMS
had not yet implemented this recommendation. We will continue to
follow up with CMS on its progress in this area.
Concluding Observations:
With the amount of estimated improper payments and the unknown amounts
of potential fraud, waste, and abuse in the Medicare program, it is
critical for CMS to act quickly and decisively to reduce them. As it
implements PPACA provisions concerning Medicare, CMS has an
opportunity to use new tools to help address fraud, waste, abuse, and
improper payments in the program. CMS has taken a number of actions
related to rule making and issuing guidance to implement recent
legislative and regulatory provisions, but because many efforts are in
process, it is too early to gauge their effectiveness. These
requirements will be critical in helping ensure integrity in Medicare
operations, as will additional evaluation and oversight to determine
whether they are implemented as intended and have the desired effect
on ensuring that payments are made for intended and proper purposes.
Notably, we are beginning new work to assess CMS's efforts to
strengthen the standards and procedures for Medicare provider
enrollment to reduce the risk of enrolling providers that are intent
on defrauding or abusing the program. We are also examining the
effectiveness of different types of prepayment edits in Medicare
systems and of CMS's oversight of its contractors in implementing
those edits to help ensure that Medicare pays claims correctly the
first time. The level of importance CMS places on effectively
implementing our recommendations and the requirements established by
recent laws and guidance will be a key factor in reducing improper
payments and potential fraud, waste, and abuse in the Medicare program
and ensuring that federal funds are used efficiently and for their
intended purposes. In this regard, we plan to continue monitoring
these issues.
Chairman Platts, Ranking Member Towns, this completes my prepared
statement. I would be happy to respond to any questions you or other
members of the subcommittee may have at this time.
GAO Contacts and Staff Acknowledgments:
For more information regarding this testimony, please contact, Kay L.
Daly, Director, Financial Management and Assurance, at (202) 512-9312
or by e-mail at DalyKL@gao.gov or Kathleen M. King, Director, Health
Care, at (202) 512-7114 or by e-mail at KingK@gao.gov. Contact points
for our Offices of Congressional Relations and Public Affairs may be
found on the last page of this testimony.
Individuals making key contributions to this testimony included
Valerie Melvin, Director; Carla Lewis, Assistant Director; Sheila K.
Avruch, Assistant Director; Teresa Tucker, Assistant Director;
Jacquelyn Hamilton; Jim Healy; Jason S. Kirwan; Crystal Lazcano; and
Chelsea Lounsbury.
[End of section]
Appendix I: Recent Key Legislative and Executive Branch Efforts:
Over the past couple of years, Congress and the executive branch have
taken a number of actions intended to heighten the attention given to
the issue of improper payments and to promote corrective actions. The
Centers for Medicare & Medicaid Services' (CMS) efforts to identify
and remediate Medicare improper payments will be affected by these new
initiatives. Table 1 summarizes the recent legislative and executive
branch efforts intended to improve oversight and accountability over
improper payments governmentwide, as well as key actions specific to
Medicare.
Table 1: Recent Key Legislative and Executive Efforts to Improve
Oversight and Accountability over Improper Payments:
Date: March 2009;
Action: Medicare fee-for-service national recovery audit contractor
program implementation begins: (as required by the Tax Relief and
Health Care Act of 2006).
Date: November 2009;
Executive Order 13520, Reducing Improper Payments.
Date: March 2010;
Action: Presidential memorandum, Finding and Recapturing Improper
Payments; Patient Protection and Affordable Care Act (PPACA),
including expanding the national recovery audit contractor program to
Medicare Advantage and Medicare prescription drug benefit program;
Health Care and Education Reconciliation Act of 2010.
Date: June 2010;
Action: President announced an Administration goal that Medicare fee-
for-service error rate would be cut in half by fiscal year 2012;
Presidential memorandum, Enhancing Payment Accuracy Through a "Do Not
Pay List".
Date: July 2010;
Action: Improper Payments Elimination and Recovery Act of 2010 (IPERA).
Date: September 2010;
Action: Small Business Jobs Act of 2010.
Source: GAO:
Note: The data are from GAO summary of key improper payment
initiatives.
[End of table]
In November 2009, Executive Order 13520, Reducing Improper Payments,
was intended to focus on increasing transparency and accountability
for reducing improper payments and creating incentives for reducing
improper payments.[Footnote 36] Under the Executive Order, the Office
of Management and Budget (OMB) designated 14 programs as high-priority
programs to focus attention on the programs that significantly
contribute to the federal government's improper payments. Medicare fee-
for-service, Medicare Advantage, and Medicare prescription drug
programs have been designated as high-priority programs as part of the
Executive Order.[Footnote 37] Additionally, OMB established a Web site
(www.PaymentAccuracy.gov) on the 14 high-priority programs that
provides information on (1) the programs' senior accountable officials
responsible for efforts to reduce improper payments; (2) current,
targeted, and historical estimated rates of improper payments; (3) why
improper payments occur in the programs; and (4) what federal agencies
are doing to reduce improper payments and recover overpayments.
To supplement program integrity efforts, the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 directed CMS to
conduct a 3-year demonstration project on the use of a new type of
contractors--recovery audit contractors (RAC)--in identifying
underpayments and overpayments, and recouping overpayments in the
Medicare program.[Footnote 38] The RAC demonstration program began in
2005. Subsequently, the Tax Relief and Health Care Act of 2006
required CMS to implement a national RAC program by January 1, 2010.
[Footnote 39] CMS began implementing it in March 2009.
In March 2010, the President issued a memorandum intended to expand
agency efforts to recapture improper overpayments using recapture
audits.[Footnote 40] Also, the Patient Protection and Affordable Care
Act (PPACA),[Footnote 41] as amended by the Health Care and Education
Reconciliation Act of 2010,[Footnote 42] contains provisions intended
to improve accountability over Medicare. These provisions include:
* establishing procedures for screening providers enrolling in
Medicare, including assessing the risk levels of fraud, waste, and
abuse by categories of providers;
* expanding the Medicare RAC program to Medicare Advantage and
Medicare prescription drug benefit program;
* adding requirements for providers to disclose any current or
previous affiliation with a provider that has uncollected debt; has
been or is subject to a payment suspension under a federal health care
program; has been excluded from participation under Medicare,
Medicaid, or the Children's Health Insurance Program or has had its
billing privileges denied or revoked;
* expanding the number of areas to be included in the competitive
bidding program for durable medical equipment; and:
* strengthening the Health Care Fraud and Abuse Control Program, a
joint effort of the HHS Inspector General and the Department of
Justice, which is designed to coordinate law enforcement activities
regarding health care fraud and abuse, including that in Medicare.
In June 2010, the President announced that the Administration would
reduce the error rate for the Medicare fee-for-service program by half
by fiscal year 2012. Also, the President directed agencies to check
certain databases--known as the "Do Not Pay List"--before making
payments to ensure payments did not go to individuals who were
deceased or excluded from receiving federal payments or to entities
that had been excluded from receiving federal payments.
In addition to amending the Improper Payments Information Act of 2002
(IPIA)[Footnote 43] improper payment estimation requirements, the
Improper Payments Elimination and Recovery Act of 2010 (IPERA)
[Footnote 44] established additional requirements related to (1)
federal agency management accountability; (2) recovery auditing aimed
at identifying and reclaiming payments made in error; (3) compliance
and noncompliance determinations based on an inspector general's
assessment of an agency's adherence to IPERA requirements, and
reporting that determination; and (4) an opinion on internal controls
over improper payments. OMB issued IPERA implementing guidance on
April 14, 2011.[Footnote 45]
The Small Business Jobs Act of 2010 also contains a provision
regarding claims review to prevent improper payments.[Footnote 46] It
requires CMS to use predictive modeling and other analytic techniques--
known as predictive analytic technologies--both to identify and to
prevent improper payments under the Medicare fee-for-service program.
The law requires these predictive analytic technologies to be used to
analyze and identify Medicare provider networks, billing patterns, and
beneficiary utilization patterns and detect those that represent a
high risk of fraudulent activity. Through such analysis, unusual or
suspicious patterns or abnormalities could be identified that could be
used to prioritize additional review of suspicious transactions before
payment is made.
[End of section]
Related GAO Products:
Fraud Detection Systems: Additional Actions Needed to Support Program
Integrity Efforts at Centers for Medicare and Medicaid Services.
[hyperlink, http://www.gao.gov/products/GAO-11-822T]. Washington,
D.C.: July 12, 2011.
Fraud Detection Systems: Centers for Medicare and Medicaid Services
Needs to Ensure More Widespread Use. [hyperlink,
http://www.gao.gov/products/GAO-11-475]. Washington, D.C.: June 30,
2011.
Improper Payments: Recent Efforts to Address Improper Payments and
Remaining Challenges. [hyperlink,
http://www.gao.gov/products/GAO-11-575T]. Washington, D.C.: April 15,
2011.
Status of Fiscal Year 2010 Federal Improper Payments Reporting.
[hyperlink, http://www.gao.gov/products/GAO-11-443R]. Washington,
D.C.: March 25, 2011.
Medicare and Medicaid Fraud, Waste, and Abuse: Effective
Implementation of Recent Laws and Agency Actions Could Help Reduce
Improper Payments. [hyperlink,
http://www.gao.gov/products/GAO-11-409T]. Washington, D.C.: March 9,
2011.
Medicare: Program Remains at High Risk Because of Continuing
Management Challenges. [hyperlink,
http://www.gao.gov/products/GAO-11-430T]. Washington, D.C.: March 2,
2011.
Opportunities to Reduce Potential Duplication in Government Programs,
Save Tax Dollars, and Enhance Revenue. [hyperlink,
http://www.gao.gov/products/GAO-11-318SP]. Washington, D.C.: March 1,
2011.
High-Risk Series: An Update. [hyperlink,
http://www.gao.gov/products/GAO-11-278]. Washington, D.C.: February
2011.
Medicare Recovery Audit Contracting: Weaknesses Remain in Addressing
Vulnerabilities to Improper Payments, Although Improvements Made to
Contractor Oversight. [hyperlink,
http://www.gao.gov/products/GAO-10-143]. Washington, D.C.: March 31,
2010.
Medicare Part D: CMS Oversight of Part D Sponsors' Fraud and Abuse
Programs Has Been Limited, but CMS Plans Oversight Expansion.
[hyperlink, http://www.gao.gov/products/GAO-10-481T]. Washington,
D.C.: March 3, 2010.
Improper Payments: Progress Made but Challenges Remain in Estimating
and Reducing Improper Payments. [hyperlink,
http://www.gao.gov/products/GAO-09-628T]. Washington, D.C.: April 22,
2009.
Medicare: Improvements Needed to Address Improper Payments in Home
Health. [hyperlink, http://www.gao.gov/products/GAO-09-185].
Washington, D.C.: February 27, 2009.
Medicare Part D: Some Plan Sponsors Have Not Completely Implemented
Fraud and Abuse Programs, and CMS Oversight Has Been Limited.
[hyperlink, http://www.gao.gov/products/GAO-08-760]. Washington, D.C.:
July 21, 2008.
Medicare: Improvements Needed to Address Improper Payments for Medical
Equipment and Supplies. [hyperlink,
http://www.gao.gov/products/GAO-07-59]. Washington, D.C.: January 31,
2007.
Medicare: More Effective Screening and Stronger Enrollment Standards
Needed for Medical Equipment Suppliers. [hyperlink,
http://www.gao.gov/products/GAO-05-656]. Washington, D.C.: September
22, 2005.
[End of section]
Footnotes:
[1] GAO, High-Risk Series: An Update, [hyperlink,
http://www.gao.gov/products/GAO-11-278] (Washington, D.C.: February
2011).
[2] Pub. L. No. 111-204, 124 Stat. 2224 (July 22, 2010). This
definition includes any payment to an ineligible recipient, any
payment for an ineligible good or service, any duplicate payment, any
payment for a good or service not received (except where authorized by
law), and any payment that does not account for credit for applicable
discounts. Office of Management and Budget (OMB) guidance also
instructs agencies to report payments for which insufficient or no
documentation was found as improper payments.
[3] Pub. L. No. 107-300, 116 Stat. 2350 (Nov. 26, 2002).
[4] For fiscal year 2010, OMB defined the term "significant improper
payments" under IPIA as exceeding both 2.5 percent of program payments
and $10 million. IPERA sets forth specific criteria to define the term
"significant" for future fiscal years.
[5] OMB, Circular No. A-123, app. C, Requirements for Effective
Measurement and Remediation of Improper Payments (Apr. 14, 2011); OMB
Memorandum M-10-13, Issuance of Part III to OMB Circular A-123, app. C
(Mar. 22, 2010); and OMB, Circular No. A-136 Revised, Financial
Reporting Requirements (Sept. 29, 2010).
[6] Pub. L. No. 111-148, 124 Stat. 119 (Mar. 23, 2010).
[7] Pub. L. No. 111-152, 124 Stat. 1029 (Mar. 30, 2010).
[8] Estimated improper payment amounts are based in part on prior
years' claim data, as allowed by OMB's guidance.
[9] For fiscal year 2010, HHS reported an estimate of improper
payments of $34.3 billion for Medicare fee-for-service and $13.6
billion for Medicare Advantage.
[10] Reported error rates reflect the estimated improper payments as a
percentage of total program outlays.
[11] Fraud consists of intentional acts of deception with knowledge
that the action or representation could result in an inappropriate
gain.
[12] Pub. L. No. 103-62, 107 Stat. 285 (Aug. 3, 1993).
[13] Exec. Order 13520, 74 Fed. Reg. 62201 (Nov. 20, 2009).
[14] GAO, Medicare and Medicaid Fraud, Waste, and Abuse: Effective
Implementation of Recent Laws and Agency Actions Could Help Reduce
Improper Payments, GAO-11-409T (Washington, D.C.: Mar. 9, 2011).
[15] [hyperlink, http://www.gao.gov/products/GAO-11-409T].
[16] GAO, Fraud Detection Systems: Centers for Medicare and Medicaid
Services Needs to Ensure More Widespread Use, [hyperlink,
http://www.gao.gov/products/GAO-11-475] (Washington, D.C.: June 30,
2011) and Fraud Detection Systems: Additional Actions Needed to
Support Program Integrity Efforts at Centers for Medicare and Medicaid
Services, [hyperlink, http://www.gao.gov/products/GAO-11-822T]
(Washington, D.C.: July 12, 2011).
[17] [hyperlink, http://www.gao.gov/products/GAO-11-409T].
[18] GAO, Medicare: Improvements Needed to Address Improper Payments
in Home Health, [hyperlink, http://www.gao.gov/products/GAO-09-185]
(Washington, D.C.: Feb. 27, 2009).
[19] GAO, Medicare: More Effective Screening and Stronger Enrollment
Standards Needed for Medical Equipment Suppliers, [hyperlink,
http://www.gao.gov/products/GAO-05-656] (Washington, D.C.: Sept. 22,
2005).
[20] By the end of 2011, CMS plans to further enhance provider
enrollment processes by contracting for automated enrollment screening-
-to automate initial screening tasks now generally conducted manually-
-and for a national site-visit contractor to conduct unannounced site
visits for certain providers.
[21] Pub. L. No. 108-173, § 302(b), 117 Stat. 2066, 2224 (Dec. 8,
2003), codified, as amended, at 42 U.S.C. § 1395w-3.
[22] GAO, Medicare: Improvements Needed to Address Improper Payments
for Medical Equipment and Suppliers, [hyperlink,
http://www.gao.gov/products/GAO-07-59] (Washington, D.C.: Jan. 31,
2007).
[23] Pub. L. No. 111-240, § 4241, 124 Stat. 2504, 2599 (Sept. 27,
2010).
[24] The Medicare Prescription Drug, Improvement and Modernization Act
of 2003 directed CMS to conduct a project to demonstrate how effective
the use of RACs would be in identifying underpayments and
overpayments, and in recouping overpayments in Medicare. Pub. L. No.
108-173, § 306, 117 Stat. 2066, 2256 (Dec. 8, 2003). Subsequently, in
December 2006 the Tax Relief and Health Care Act of 2006 required CMS
to implement a national RAC program by January 1, 2010. Pub. L. No.
109-342, div. B, title III, § 302, 120 Stat. 2924, 2991 (Dec. 20,
2006), codified at 42 U.S.C. § 1395ddd(h).
[25] [hyperlink, http://www.gao.gov/products/GAO-11-475].
[26] The initiative to develop a centralized data warehouse began in
2003 as an element of the agency's Enterprise Data Modernization
strategy, and CMS initially planned for the data warehouse project to
be complete by September 30, 2008. In 2006, CMS expanded the scope of
the project to not only modernize data-storage technology but also to
integrate Medicare and Medicaid data into a centralized repository and
changed the name to IDR, to reflect the expanded scope.
[27] [hyperlink, http://www.gao.gov/products/GAO-11-475].
[28] [hyperlink, http://www.gao.gov/products/GAO-11-475].
[29] GAO, Standards for Internal Control in the Federal Government,
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]
(Washington, D.C.: November 1999).
[30] GAO, Medicare Part D: Some Plan Sponsors Have Not Completely
Implemented Fraud and Abuse Programs, and CMS Oversight Has Been
Limited, [hyperlink, http://www.gao.gov/products/GAO-08-760]
(Washington, D.C.: July 21, 2008).
[31] GAO, Medicare Part D: CMS Oversight of Part D Sponsors' Fraud and
Abuse Programs Has Been Limited, but CMS Plans Oversight Expansion,
[hyperlink, http://www.gao.gov/products/GAO-10-481T] (Washington,
D.C.: Mar. 3, 2010).
[32] Policy and Technical Changes to the Medicare Advantage and the
Medicare Prescription Drug Benefit Programs, 75 Fed. Reg. 19,678 (Apr.
15, 2010).
[33] These are all aspects of internal control, which is the component
of an organization's management that provides reasonable assurance
that the organization achieves effective and efficient operations,
reliable financial reporting, and compliance with applicable laws and
regulations. Internal control standards provide a framework for
identifying and addressing major performance challenges and areas at
greatest risk for mismanagement. GAO, Internal Control Standards:
Internal Control Management and Evaluation Tool, GAO-01-1008G
(Washington, D.C.: August 2001).
[34] GAO, Medicare Recovery Audit Contracting: Weaknesses Remain in
Addressing Vulnerabilities to Improper Payments, Although Improvements
Made to Contractor Oversight, [hyperlink,
http://www.gao.gov/products/GAO-10-143] (Washington, D.C.: Mar. 31,
2010).
[35] [hyperlink, http://www.gao.gov/products/GAO-10-143].
[36] Exec. Order 13520, 74 Fed. Reg. 62201 (Nov. 20, 2009).
[37] The 14 high-error programs designated by OMB for fiscal year 2010
include: Medicare Fee-for-Service; Medicaid; Unemployment Insurance;
Medicare Advantage; Supplemental Security Income; Retirement,
Survivors, and Disability Insurance; Supplemental Nutrition Assistance
Program; National School Lunch Program; Rental Housing Assistance
Programs; Federal-Aid Highway Program, Highway Planning and
Construction; Children's Health Insurance Program; Earned Income Tax
Credit; High Cost Program of the Universal Service Fund; and Medicare
Prescription Drug Benefit. The Children's Health Insurance Program,
High Cost Program of the Universal Service Fund, and Medicare
Prescription Drug Benefit programs did not report improper payment
error rates and amounts for fiscal year 2010.
[38] Pub. L. No. 108-173, § 306, 117 Stat. 2066, 2256-57.
[39] Pub. L. No. 109-432, div B., title III, § 302, 120 Stat. 2922,
2991-92, codified at 42 U.S.C. § 1395 ddd(h).
[40] Finding and Recapturing Improper Payments, 75 Fed. Reg. 12119
(Mar. 15, 2010).
[41] Pub. L. No. 111-148, § 6402(i), 124 Stat. 119, 760 (Mar. 23,
2010).
[42] Pub. L. No. 111-152, § 1303(a), 124 Stat. 1029, 1057 (Mar. 30,
2010).
[43] Pub. L. No. 107-300, 116 Stat. 2350 (Nov. 26, 2002).
[44] Pub. L. No. 111-204, 124 Stat. 2224 (July 22, 2010).
[45] OMB, Circular No. A-123, app. C, Requirements for Effective
Measurement and Remediation of Improper Payments (Apr. 14, 2011).
[46] Pub. L. No. 111-240, § 4241, 124 Stat. 2504, 2599 (Sept. 27,
2010).
[End of section]
GAO's Mission:
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people.
GAO examines the use of public funds; evaluates federal programs and
policies; and provides analyses, recommendations, and other assistance
to help Congress make informed oversight, policy, and funding
decisions. GAO's commitment to good government is reflected in its core
values of accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through GAO's Web site [hyperlink, http://www.gao.gov]. Each
weekday, GAO posts newly released reports, testimony, and
correspondence on its Web site. To have GAO e-mail you a list of newly
posted products every afternoon, go to [hyperlink, http://www.gao.gov]
and select "E-mail Updates."
Order by Phone:
The price of each GAO publication reflects GAO‘s actual cost of
production and distribution and depends on the number of pages in the
publication and whether the publication is printed in color or black and
white. Pricing and ordering information is posted on GAO‘s Web site,
[hyperlink, http://www.gao.gov/ordering.htm].
Place orders by calling (202) 512-6000, toll free (866) 801-7077, or
TDD (202) 512-2537.
Orders may be paid for using American Express, Discover Card,
MasterCard, Visa, check, or money order. Call for additional
information.
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]:
E-mail: fraudnet@gao.gov:
Automated answering system: (800) 424-5454 or (202) 512-7470:
Congressional Relations:
Ralph Dawn, Managing Director, dawnr@gao.gov:
(202) 512-4400:
U.S. Government Accountability Office:
441 G Street NW, Room 7125:
Washington, D.C. 20548:
Public Affairs:
Chuck Young, Managing Director, youngc1@gao.gov:
(202) 512-4800:
U.S. Government Accountability Office:
441 G Street NW, Room 7149:
Washington, D.C. 20548:
