October 29,2010

Grassley Seeks Details of Potential Conflicts of Interest Among CMS Contractors

WASHINGTON – Sen. Chuck Grassley is asking the Centers for Medicare and Medicaid Services to detail any identified conflicts of interest among CMS contractors and any steps taken to minimize and prevent such conflicts of interest.  Grassley is concerned that the financial relationships between certain contractors may create conflicting roles that impair a contractor’s objectivity when monitoring and reviewing another contractor’s work.  Such conflicts may also interfere with contractors’ aggressive pursuit of fraud, waste and abuse. 

Earlier this year, the Government Accountability Office upheld a protest to a CMS decision to give a company the contract to detect and investigate potential fraud, waste and abuse because of the contractor’s potential conflict of interest. Specifically, the contract could have put the company in the position of evaluating the work of its parent company, another CMS contractor.  Grassley is interested in the extent of more such cases.

“Financial relationships can make contractors less aggressive in overseeing each other than they might be without those relationships,” Grassley said.   “Transparency and prevention of conflicts of interest could strengthen the detection of fraud, waste and abuse in government health programs and benefit taxpayers.”

Previously, Grassley raised concerns about program safety contractors -- who are tasked with locating and addressing waste, fraud, or abuse -- failing to adequately open new investigations or refer cases to law enforcement when appropriate.  Grassley also wrote to CMS recently to seek greater transparency from program officials regarding contractor accountability and how much contractors are being paid to identify and investigate potential waste, fraud and abuse.

Grassley is ranking member of the Committee on Finance, with jurisdiction over Medicare and Medicaid. 

The text of Grassley’s Oct. 15 letter on greater transparency and oversight of anti-fraud contractors is available here.

The text of Grassley’s Oct. 6 letter is available here.