Medicare Update

GAO Audit Reveals $90 Million in Questionable Medicare Payments

In a recently released report to Congress, the Government Accountability Office (GAO) reports that the Centers for Medicare & Medicaid Services (CMS) made approximately $90 million in questionable payments to contractors, which potentially represent improper, unsubstantiated or wasteful payments.

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) established the Medicare Part D prescription drug program.  Congress appropriated $1 billion to CMS for start-up administrative costs associated with implementing the MMA provisions.  According to the report, CMS expended over 90 percent of the $1 billion by the end of December 2006.  Of that amount, about $735 million was paid to over 250 contractors and vendors for services (e.g., information technology, 1-800-MEDICARE help line support, and outreach and education).  The GAO also reports that CMS paid federal and state agencies for services (e.g., printing, mailing and educating the public).

Because Congress gave CMS broad authority on how to use the appropriation, the Senate Finance Committee recently requested that the GAO determine: how CMS used the $1 billion appropriation; whether CMS's contracting practices and internal controls were adequate to avoid waste and prevent or detect improper payments; and whether payments to contractors were properly supported as valid use of government funds.

According to the report, the GAO found that CMS did not allocate sufficient resources to keep pace with the contract awards and adequately perform contract and contractor oversight.  For instance, the GAO found payments for costs that did not comply with contractual terms or applicable regulations (e.g., travel costs in excess of allowable limits). In some instances, the GAO was also unable to obtain adequate documentation (e.g., vendor invoices or time sheets) to support billed costs.  In the report, the GAO makes a number of recommendations to improve the contracting process.

In a Press Release, Senate Finance Committee Chairman Max Baucus, Finance Ranking Member Charles Grassley, and Health Subcommittee Chairman Jay Rockefeller also urged CMS to correct the major structural deficiencies.

CMS Launches 2008 Medicare Provider Satisfaction Survey

On November 29, 2007, the Centers for Medicare & Medicaid Services (CMS) announced in a Press Release that it has begun the 2008 Medicare Contractor Provider Satisfaction Survey (MCPSS).

The MCPSS is designed to collect data on provider satisfaction levels with 7 parts of the provider-contractor relationship.  Those parts include: provider inquiries, provider outreach and education, claims processing, appeals, provider enrollment, medical review, and provider audit and reimbursement.  CMS reports that Medicare Administrative Contractors (MACs) will be required to achieve performance targets on the MCPSS as part of their contract requirements by 2009.

The 2008 MCPSS will be sent to about 35,000 randomly selected providers. The providers selected to participate in the 2008 MCPSS will be notified by December 2007. CMS expects to make the results of the 2008 MCPSS publicly available in July 2008.

According to CMS, the 2007 MCPSS revealed that the provider inquiry function has the greatest influence on whether providers are satisfied with their Medicare contractors. In 2006, the claims processing function was the strongest predicator of provider satisfaction.  For further information on the 2007 MCPSS results, visit the MCPSS page of the CMS website.