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The United States Senate Committee on Finance: Newsroom - Ranking Member's News
For Immediate Release
August 13, 2014

GAO Report Confirms Need for Additional Oversight of Medicare Claims Reviews

WASHINGTON – Today, a bipartisan group of 12 lawmakers from the U.S. Senate and U.S. House of Representatives highlighted a new Government Accountability Office (GAO) report entitled, “Medicare Program Integrity: Increased Oversight and Guidance Could Improve Effectiveness and Efficiency of Postpayment Claims Reviews.”  The report, which was undertaken following a bipartisan and bicameral request to GAO, found that the Centers for Medicare & Medicaid Services (CMS) should take additional steps to improve sufficient oversight and guidance to ensure contractor compliance with CMS regulations and to prevent claim review duplication during the auditing of Medicare providers and suppliers.

CMS utilizes four types of contractors (Medicare administrative contractors, error rate contractors, recovery auditors and anti-fraud contractors) to conduct postpayment reviews of Medicare claims in an effort to control and reduce improper payments.  Each contractor has a unique role in combating improper payments. However, the lack of CMS guidance and clear requirements has resulted in duplicative work by various contractors and a lack of consistency in the communications between the contractors conducting audits and the providers/suppliers being audited. 

The provider community has raised numerous concerns about the consistency and accuracy of the audit process over the past few years and this report is the first effort to determine what steps could be taken to improve the process.  The information in this report can now be used by Congress and CMS to help make improvements and ensure more consistent oversight of both the contractors and audit process.

Key findings from the GAO report follow and a full copy of the report can be found HERE:

  • CMS’s      Current Duplication Reduction Efforts are Insufficient: CMS      established the Recovery Audit Data Warehouse to track recovery audit      activities thereby preventing duplication of reviews.  However, the      database was not designed to provide information on all possible      duplication, and its data are not reliable because other postpayment      contractors did not consistently enter information about their reviews.      CMS has not provided sufficient oversight of these data or issued complete      guidance to contractors on avoiding duplicative claims reviews.
  • Communication      Between Recovery Auditors and Providers is Flawed: CMS      requires auditors to include certain content in correspondence with      providers, but requirements are not always clear and vary across      contractor types.  Contractors vary in their compliance with their      requirements. CMS’s oversight of correspondence varies across contractors,      which decreases assurance that contractors consistently comply with      requirements. In the correspondence reviewed, GAO found high compliance      rates for some requirements, but low compliance rates for requirements      about communicating providers’ rights, which could affect providers’      ability to exercise their rights. 
  • Current      CMS Coordination Strategies Should be Improved: CMS      has strategies to coordinate contractors’ activities; however, these      strategies have not led to consistent requirements across contractor types      or full coordination between contractors.

CMS concurred with the findings of the report and plans to improve CMS oversight and guidance as a result.

The report was requested by Sen. Ron Wyden (D-Oregon), Finance Committee Chairman; Sen. Orrin Hatch (R-Utah), Finance Committee Ranking Member; Sen. Tom Carper (D-Delaware), Homeland Security and Governmental Affairs Committee  (HSGAC) Chairman;  Sen. Tom Coburn (R-Oklahoma), HSGAC Ranking Member; Sen. Chuck Grassley (R-Iowa), Judiciary Committee Ranking Member; Sen. Claire McCaskill (D-Missouri), HSGAC Subcommittee on Contracting Oversight Chairwoman; Sen. Bob Corker (R-Tennessee); Rep. Fred Upton (R-Michigan), Energy and Commerce Committee Chairman; Rep. Henry A. Waxman (D- California), Energy and Commerce Committee Ranking Member; Rep. Charles Boustany, M.D. (R-Louisiana), Ways and Means Subcommittee on Oversight Chairman; Rep. John Lewis (D-Georgia), Ways and Means Subcommittee on Oversight Ranking Member; and Rep. Dianna DeGette (D-Colorado), Energy and Commerce Subcommittee on Oversight and Investigations Ranking Member.

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