GAO Issues Report on Post-Payment Claims Reviews by CMS Contractors

by Foley & Lardner LLP
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The U.S. Government Accountability Office (GAO) recently issued a report entitled “Medicare Program Integrity: Increased Oversight and Guidance Could Improve Effectiveness and Efficiency of Post-Payment Claims Reviews,” which analyzes the processes used by the Centers for Medicare & Medicaid Services (CMS) to avoid the duplication of post-payment claims reviews by its contractors. GAO’s report focused on the extent to which:

  • CMS has data to assess whether the CMS contractors conduct duplicative post-payment claims reviews and whether CMS ensures that these contractors do so only when appropriate;
  • CMS’ requirements for contractor correspondence with providers help ensure effective communication;
  • CMS uses quality assurance processes to ensure that contractors’ post-payment claims review decisions about whether claims were paid properly are appropriate; and
  • CMS has strategies for coordination of post-payment claims review activities among different types of contractors.

The report follows a similar study undertaken by GAO in July 2013, which recommended that CMS examine the post-payment review requirements for the contractors to evaluate those requirements that could be made more consistent without disrupting efforts to reduce improper payments.

GAO’s report reviewed the post-payment claims review practices of the following four types of CMS claims contractors:

  • The Comprehensive Error Rate Testing (CERT) contractor, which estimates Medicare’s improper payment rate based on its review of claims;
  • Medicare Administrative Contractors (MACs), which process and pay claims;
  • Recover Auditors (RA), which review payments that have been improperly made but not previously reviewed by other contractors; and
  • Zone Program Integrity Contractors (ZPICs), which review claims for potential fraud.

In 2012, RAs conducted 83% of the post-payment claims reviews, while the CERT contractor, MACs, and ZPICs conducted 3%, 6%, and 8% of such reviews, respectively.

In connection with its report, GAO reviewed CMS’ requirements for claims reviews; interviewed CMS officials, certain contractors, and provider associations; analyzed CMS data; evaluated samples of contractor correspondence for compliance with CMS requirements; and evaluated CMS’ requirements and oversight against federal internal control standards. Based on these efforts and information, GAO acknowledged that CMS has implemented a number of measures to guide, oversee, and improve the coordination among its contractors. However, the report concludes that additional efforts by CMS would improve the efficacy and efficiency of the contractors’ claims reviews.

Specifically, GAO indicates that CMS does not have adequate information to estimate the number of duplicative claims reviews performed by its contractors. CMS maintains a Recovery Audit Data Warehouse, which enables the CERT contractor, MACs, and ZPICs to identify and exclude claims that have been reviewed so that the RA will not duplicate a review. However, in some cases, GAO found that the contractors do not consistently log their claims review information. This can result in duplicate post-payment reviews by the RAs. GAO recommends that CMS monitor the Recovery Audit Warehouse to ensure that all post-payment review contractors are submitting required data and that the data the database contains is accurate and complete.

GAO found that CMS has issued clear guidance to RAs and the CERT contractor about whether they may conduct duplicative claims reviews. However, similar guidance has not been issued for the ZPICs and MACs, which may lead to confusion regarding whether duplicative claims reviews by these contractors are permitted in some circumstances. GAO recommends that CMS issue clear guidance regarding which contractors may conduct duplicative claims reviews.

GAO concludes that the contractors sometimes issued inconsistent guidance in their written communications to providers, which may have resulted in providers receiving less information about their responsibilities in responding to the contractor or their rights if their claims were denied. GAO recommends that CMS implement more-consistent requirements and better monitoring of contractors’ compliance with correspondence content requirements.

Lastly, GAO found that CMS does have strategies to coordinate internally regarding its contractors, but GAO suggested that CMS address the different requirements in post-payment claims reviews conducted by the contractors to increase uniformity of approach among the contractors. In particular, GAO notes that increased coordination between ZPICs and RAs is necessary.

The U.S. Department of Health and Human Services reviewed GAO’s report and concurred with GAO’s formal recommendations.

Originally, this article was an alert sent to the American Health Lawyers Association’s (AHLA) Regulation, Accreditation and Payment Practice Group. For more information, visit AHLA’s website.

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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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