CMS Systems Continue to Struggle with Improper Medicare Payments

Although the Centers for Medicare and Medicaid Services is making progress in reducing fraud in the Medicare program, last year CMS estimated that improper payments--including fraudulent claims--amounted to almost $50 billion, according to the Government Accountability Office.

CMS and its contractors are attempting to reduce fraud in Medicare by screening and enrolling providers, detecting and investigating potential fraud, and identifying improper payments and vulnerabilities that could lead to payment errors, but progress has been slow, Kathleen King, GAO’s director of healthcare, testified on April 30 before the House Ways and Means Subcommittee on Health.

King said that more action is needed on the part of CMS and its contractors to address Medicare fraud, waste, and abuse. While CMS has taken steps to improve its use of two IT systems that could help analysts identify fraud after claims have been paid, those efforts have fallen short.

For instance, the Integrated Data Repository (IDR)--a central data store of Medicare and other data needed to help CMS program integrity staff and contractors detect improper payments of claims--does not include all the data necessary to perform its tasks. CMS has not addressed GAO's previous recommendation to develop reliable schedules to incorporate all types of IDR data. As a result, King testified that this lack of data "could lead to additional delays in making available all of the data that are needed to support enhanced program integrity efforts and achieve the expected financial benefits."

An official of the Department of Health and Human Services echoed the sentiments of GAO during testimony before the subcommittee. Gloria Jarmon, deputy inspector general for audit services at HHS, said CMS data systems don’t always indicate a beneficiary’s entitlement has been terminated until after a fee-for-service claim has been processed.

OIG identified millions in Medicare payments made on behalf of deceased beneficiaries, testified Jarmon. "Most of these improper payments occurred despite CMS having accurate information on beneficiaries’ date of death," she said. "Eleven percent of these improper payments occurred because dates of death were either missing from CMS’s Enrollment Database or were incorrect."

GAO’s King noted positive developments, as well, during her testimony. The One Program Integrity (One PI) initiative, which is a web portal giving CMS staff and contractors a single source of access to data contained in IDR, as well as tools for analyzing those data, is operational and CMS has scheduled training.

However, King also said that as of March 2014, CMS had not established deadlines for program integrity contractors to begin using One PI. "Without these deadlines, program integrity contractors will not be required to use the system, and as a result, CMS may fall short in its efforts to ensure the widespread use and to measure the benefits of One PI for program integrity purposes," she said.

King informed the subcommittee that GAO has work underway assessing the potential use of electronic-card technologies to help reduce Medicare fraud. In addition, government auditors are examining the extent to which CMS information systems can prevent and detect the continued enrollment of ineligible or potentially fraudulent providers in Medicare.