GAO Director for Healthcare Provides Recommendations for CMS to Combat Fraud, Waste and Abuse in the Medicare Program in Testimony Before the Energy and Commerce Committee


On June 25, 2014, Kathleen M. King, Director of Health Care for the Government Accountability Office (GAO) testified before the House Committee on Energy and Commerce, Subcommittee on Oversight and Investigations explaining the GAO’s recommendations for CMS to address fraud, waste, and abuse in the Medicare program. She discussed the following three areas for reducing fraud, waste, and abuse: (i)  provider and supplier enrollment standards and procedures; (ii) prepayment and postpayment claims audits; and (iii) identified vulnerabilities.  In each of these areas, she highlighted prior GAO findings and recommendations made to CMS that, in the GAO’s view, CMS had not thoroughly implemented or addressed. 

With respect to provider and supplier enrollment standards, Ms. King stated that the OIG recommends that CMS utilize its authority granted by the ACA to require surety bonds for certain types of providers and suppliers.  The OIG also recommends that CMS implement its authority to also require increased disclosure by providers and suppliers enrolling or revalidating of prior actions taken against them, such as whether a supplier has been subject to a payment suspension from a federal healthcare program.  Finally, she points out that CMS has not yet established the core elements of compliance programs, as it was required to do by the ACA.

Regarding prepayment and postpayment audits, the GAO recommends that CMS increase the use of prepayment edits, particularly through the increased use of automated edits by individual MACs.  Ms. King also noted that CMS has been slow at integrating predictive analytic technologies to generate leads for ZPICs and suspending claims on a prepayment basis.  Ms. King also stated the GAO’s recommendation that CMS take further actions to implement two information technology systems, the Integrated Data Repository (IDR) and One Program Integrity (One PI), to assist with fraud identification.  Lastly, she recommended that CMS improve its contractor oversight.

With respect to addressing identified vulnerabilities, Ms. King testified that both the GAO and the OIG have made recommendations to CMS to improve tracking of vulnerabilities that can lead to improper payments.  Although CMS has developed written guidance for tracking vulnerabilities, Ms. King noted that there is still room for improvement.  She also testified that CMS had failed to implement a 2012 GAO recommendation that the agency utilize Medicare beneficiary cards without Social Security numbers to reduce the risk of identity theft. 

Providers and suppliers should continue to monitor these issues identified in Ms. King’s testimony as areas for potential action by CMS in the future.  A copy of her written testimony is available here.

Reporter, Kate Stern, Atlanta, +1 404 572 4661,


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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