The Centers for Medicare and Medicaid Services came under fire at a House Energy and Commerce Health Subcommittee hearing held March 4 that highlighted the Medicare program's continuing problems in combating waste, fraud and abuse. Specifically, the congressional hearing called out CMS’ lack of oversight of contractors who manage the Medicare program and administer more than a half a trillion dollars in benefits annually.

In conjunction with the hearing, the Department of Health and Human Services' Office of Inspector General released two new reports on CMS’ oversight of its Medicare Part C (Medicare Advantage) and Part D (Prescription Drug) contractors. One OIG report found that while CMS regularly reviews Part C reporting requirements data, its follow-up and use of the data are limited. The second OIG report revealed that more than half of Part D plans did not voluntarily report fraud and abuse data.

"The OIG has found that CMS does not leverage data to improve oversight, does not investigate variation in data across contractors, does not address underperforming contractors timely and required corrective action plans, and does not share information with beneficiaries and other stakeholders that could assist anti-fraud efforts," testified Robert Vito, Regional Inspector General for Evaluation and Inspections at the OIG.

Subcommittee Chairman Rep. Joe Pitts (R-Penn.) cited HHS’s Fiscal Year 2013 Agency Financial Report which disclosed an improper payment rate for Medicare fee-for-service of 10.1 percent last year. "Adding in the improper payments for Parts C and D, with error rates of 11.4 percent and 3.1 percent, respectively, improper payments totaled over $49.8 billion," said Pitts.

Rep. Frank Pallone (D-N.J.), Ranking Member of the Subcommittee, argued that CMS is ultimately responsible for overseeing all of the contractors' performance and conducting regular oversight of Medicare plans.  

"Two OIG reports that were released today note significant concern with reporting of fraud and abuse incidence in the Medicare Advantage and Part D programs. There's wide variability in reporting and many have failed to report any potential fraud and abuse incidence at all," said Rep. Henry Waxman (D-Calif.), Ranking Member of the House Energy and Commerce. "CMS needs to do a better job managing the private insurance companies that participate in Medicare."

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