GAO to Medicare: Catch fraud sooner

May 3, 2012

The Centers for Medicare and Medicaid Services got some unwelcome criticism from the Government Accountability Office: Start preventing fraudulent payments, or else. Discover what other deficiencies were nabbed.

The Centers for Medicare and Medicaid Services (CMS) has begun several programs and made inroads toward reducing Medicare fraud, but the agency could and should be doing a lot more, according to a new report from the U.S. Government Accountability Office (GAO).

The report says that although CMS has strengthened its provider enrollment system to attempt to screen providers based on their fraud risk, the agency has failed to follow through on several other initiatives, including some that will be  part of the Patient Protection and Affordable Care Act (PPACA). For example, CMS has not set out a system for identifying which providers will have to post surety bonds to ensure that fraudulently billed claims payments can be recovered, nor has the agency established core elements for provider compliance programs.

The GAO has noted previously that pre-payment claim reviews can prevent fraudulent-claim payment and, although CMS has controls in place for such reviews, it needs to use them in conjunction with post-payment claim reviews that identify fraud patterns.

It’s critical that processes exist to prevent the payment of fraudulent claims, the report says. The GAO report says CMS should make better use of the powers granted it through recent legislation to prevent fraud from occurring, rather than responding after the fact. The GAO says it will continue to monitor CMS programs for Medicare fraud and make additional recommendations when possible.

In another recent report, the GAO also criticized CMS’ oversight of the Medicaid program after finding gaps in compliance and payment rates between states. For example, the GAO says in two of the 26 states it reviewed, CMS failed to review one state’s rates for several years, whereas another state’s rates had not been reviewed in full since the actuarial soundness requirements took effect.

The GAO lays partial blame for the lack of oversight on the wide variation in procedures and protocols across CMS regional offices, adding that CMS can’t ensure that managed care rates are appropriate and that federal and state funds aren’t being misspent without proper oversight. CMS reported in 2011 that it was redesigning its audit program to achieve better oversight results, and the GAO says it will continue to monitor CMS programs and offer guidance.

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