Medicare Agency May Not be Realizing the Full Potential of Anti-Fraud Contracts

The government doesn’t have enough information about whether “program integrity” contracts designed to expose and prevent Medicare fraud are as effective as they could be in fulfilling agency goals, an audit found.

For 20 years, the Centers for Medicare and Medicaid Services has wrestled with an undetermined amount of fraudulent billing that has kept Medicare on the Government Accountability Office’s high-risk list, the watchdog agency noted in a report released Monday.

CMS in calendar year 2012 reported savings of $250 million from its seven regionally based Zone Program Integrity Contractors, through advance identification of improper billings. The contracting program reported having more than 130 of its investigations accepted by law enforcement for potential prosecution and stopped more than 160 providers from receiving additional Medicare payments in 2012.

However, the auditors wrote, “CMS lacks information on the timeliness of ZPICs' actions--such as the time it takes between identifying a suspect provider and taking actions to stop that provider from receiving potentially fraudulent Medicare payments--and would benefit from knowing if ZPICs could save more money by acting more quickly.”

And though setting specific performance metrics can be “problematic,” GAO said, the failure of CMS to link the contractors’ timely actions against high-risk benefits providers to precise goals may be “hindering the agency's ability to effectively oversee its progress toward meeting its goal of fighting fraud and working to eliminate improper payments.” 

CMS spent $108 million on the anti-fraud contracts in 2012, GAO noted in the report requested by Sens. Tom Carper, D-Del., chairman of the Homeland Security and Governmental Affairs committee, and Tom Coburn, R-Okla., the committee’s ranking member. CMS investigative staff in 2012 conducted about 3,600 beneficiary interviews, almost 780 onsite inspections and reviews of more than 200,000 Medicare claims.

GAO recommended that CMS compile more information on the timeliness of the contractor actions and develop performance metrics linked to broader agency program integrity goals. CMS did not respond to the recommendations.