Healthcare Regulation Update: GAO Makes Recommendations to HHS and CMS Regarding Medicare Audit Consistency

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Following a detailed study of the manner by which the Centers for Medicare and Medicaid Services (“CMS”) engages in postpayment claims reviews to identify improper payments, the U.S. Government Accountability Office (“GAO”) last month issued a report entitled “Increasing Consistency of Contractor Requirements May Improve Administrative Efficiency.” As described in the GAO report, GAO’s investigation was to designed to address concerns over a lack of coordination and oversight of various Medicare auditors, including MACs, ZPICs, CERT contractors and RAs. Specifically, the GAO addressed whether CMS was “maintaining an appropriate balance between detecting improper payments efficiently and adding unnecessary administrative burden to providers.”

Ultimately, the GAO made three recommendations:  (1) Examine all post-payment review requirements for contractors to determine those that could be made more consistent without negative effects on program integrity; (2) Communicate publicly CMS’s findings and its time frame for taking further action; and (3) Reduce differences in post-payment review requirements where it can be done without impeding the efficiency of its efforts to reduce improper payments.

The U.S. Department of Health & Human Service (“HHS”) has agreed with the GAO’s recommendations and has agreed to take steps to reduce differences in post-payment review requirements where appropriate. HHS noted that CMS has already begun examining its processes for postpayment claims review and requirements related to ADRs to determine whether CMS could, to some degree, standardize audit requirements regardless of the type of Medicare audit. HHS further agreed to communicate its additional impressions from the GAO report and identify timeframes for implementing agreed upon procedural changes.