GAO Testimony Recommends CMS Improve Enrollment, Payment, and Oversight Procedures

GAO Testimony

(June 23, 2010): Yesterday we told you about recent GAO testimony before Congress regarding the impact of health care reform on HHS enforcement efforts. On the same day, GAO Health Care Director Kathleen M. King offered Congress testimony that made clear that the Centers for Medicare & Medicaid Services (CMS) continue to face substantial challenges to preventing Medicare fraud and Medicaid fraud, waste, and abuse. The GAO’s recommendations signal that home health agencies (HHAs) and suppliers of durable medical equipment (DMEs) are likely targets of future audits and that contractors require improved oversight.

King critiqued the enrollment process for prospective HHAs, saying, “We found that the screening process was not thorough. This may have contributed to a rapid increase in the number of HHAs that billed Medicare in certain states with unusually high rates of billing patterns indicative of fraud and abuse." (emphasis added). Similarly, GAO found that the DME enrollment process contains persistent weaknesses. King assessed that the effectiveness of new enrollment screening authorities provided in the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act (HCERA) “is unknown and will depend on CMS’ implementation.”

HHAs and DMEs are also identified as vulnerable services that do not receive adequate post-payment review by recovery audit contractors (RACs). “Because RACs are paid on a contingent fee based on the dollar value of the improper payments identified, during the demonstration RACs focused on claims from inpatient hospital stays, which are generally more costly services.” Recall that RACs are bounty hunters, explaining their limited focus on classes of high-value claims. GAO recommends CMS direct other contractors to focus on high vulnerability items and services that RACs are known to overlook.

Next, targeting drug plan sponsors, King reminded Congress of a 2008 GAO study showing that the sponsors covering one-third of all Medicare prescription drug plan enrollees had not completely implemented CMS’ required compliance plan elements and fraud prevention measures. Although CMS published a final rule to address this failing in April 2010, GAO continues to identify the improved oversight of drug plan sponsors and other contractors as a major need.

Ultimately, GAO offered recommendations to CMS regarding improvement of (1) enrollment screening processes, (2) pre-payment claims review, (3) post-payment claims review, (4) contractor oversight, and (5) the process for addressing identified vulnerabilities. Regular observers will notice, however, that several of GAO’s June 2010 recommendations are virtually identical to recommendations that date back as far as September 2005 and that are not yet implemented.

Health Care Attorney

Should you have any questions regarding these issues, don’t hesitate to contact us. For a complementary consultation, you may call Robert W. Liles or one of our other attorneys at 1 (800) 475-1906.