GAO: CMS Fraud Prevention System Uses Claims Analysis to Address Fraud

September 2017

The Centers for Medicare & Medicaid Services has an IT system—the Fraud Prevention System— that analyzes claims to identify health care providers with suspect billing patterns. Program integrity contractors get leads from the system to pursue fraud investigations.

GAO found that the system accounted for about 20 percent of CMS's fraud investigations in fiscal years 2015 and 2016. It also helped the contractors identify leads and triage them faster (shown below).

The system also uses automated controls that identify payments associated with potential fraud and deny claims that violate Medicare rules or policies before the claims are paid. Report


HHS OIG: The Centers for Medicare & Medicaid Services Could Improve Performance Measures Associated With the Fraud Prevention System

September 2017

The Small Business Jobs Act of 2010 (the Act) requires the Department of Health and Human Services (the Department) to use predictive modeling and other analytics technologies (fraud-detection models) to identify improper Medicare Fee-for-Service claims that providers submit and prevent the payment of such claims. To fulfill this requirement, the Department designated the Centers for Medicare & Medicaid Services (CMS) to develop and implement the Fraud Prevention System (FPS).

OIG certified the actual and projected savings with respect to improper payments prevented and recovered, and the return on investment related to the Department's use of the FPS for each of its first 3 implementation years. However, when performing that work, OIG became aware that the Department might not have the capability to trace the savings from administrative actions back to the specific FPS model that generated the savings. Without this capability, the Department is not able to accurately evaluate an individual FPS model's performance. Therefore, the Department may be limited in how it assesses the effectiveness of its predictive analytics technologies. OIG performed this audit to follow up on some of our concerns from our previous audits. Report


HHS OIG: Medicare Inappropriately Paid Acute-Care Hospitals for Outpatient Services They Provided to Beneficiaries Who Were Inpatients of Other Facilities

September 2017

Medicare did not appropriately pay acute-care hospitals any of the $51.6 million for outpatient services that we reviewed. In addition, beneficiaries were held responsible for unnecessary deductibles and coinsurance of $14.4 million paid to the acute-care hospitals for outpatient services. Generally, Medicare should not pay an acute-care hospital for outpatient services provided to an inpatient of another facility, such as a long-term-care hospital. Instead, the services should be provided under arrangements between the two facilities, and Medicare should pay the inpatient facility for all services provided to a beneficiary (as part of the facility's inpatient payment rate).

Medicare overpaid the acute-care hospitals because the system edits that should have prevented or detected the overpayments were not working properly. If the system edits had been working properly since 2006, Medicare could have saved almost $100 million, and beneficiaries could have saved $28.9 million in deductibles and coinsurance that may have been incorrectly collected from them or someone on their behalf. Report


GAO: CMS: Analysis of Contracting Data

September 2017

Nearly 1 in 3 Americans relies on Medicare or Medicaid for services from hospital stays and lab tests to flu shots and prescription drugs. The Centers for Medicare and Medicaid Services uses an extensive network of private contractors to administer its programs.

In FY 2016, CMS spent about $7.2 billion on these contracts, an increase of about 40% since 2012. GAO found that 97% of this amount went to services, such as IT and administrative support. Additionally, since competition in government contracting generally saves money, CMS increased its use of competitive contracts from 78% to 96% during this same period. Report


GAO: Drug Discount Program: Update on Agency Efforts to Improve 340B Program Oversight

July 2017

Under the 340B Drug Pricing Program, if drug manufacturers want Medicaid to cover their drugs, they are required to sell outpatient drugs at discounted prices to covered entities—such as eligible clinics and hospitals.

GAO's 2011 Report found weaknesses in the Health Resources & Services Administration's (HRSA) oversight of the 340B program.

This testimony describes HRSA’s progress in addressing GAO's recommendations: it now audits entities to ensure they comply with program rules, and clarified its guidance on equitable distribution of drugs to 340B entities. Report


GAO: CMS's Efforts to Ensure Proper Payments and Identify and Recover Improper Payments

July 2017

The Centers for Medicare & Medicaid Services estimates that about $16 billion or nearly 10% of its payments to Medicare Advantage organizations were improper.

In this testimony, GAO reviews several problems found with CMS's efforts to ensure proper payments in this program that serves about a third of Medicare beneficiaries.

For example, certain CMS audits do not target Medicare Advantage contracts at highest risk for improper payments—payments made in error or due to potential fraud. CMS has also not fully validated the data—known as "encounter data"— it uses to ensure proper Medicare Advantage payments. Report


GAO: Improper Payments: Improvements Needed in CMS and IRS Controls over Health Insurance Premium Tax Credit

July 2017

In fiscal year 2016, the Department of Health and Human Services' (HHS) Centers for Medicare & Medicaid Services (CMS) assessed its advance premium tax credit (PTC) program as susceptible to significant improper payments. CMS instituted a qualitative method for assessing the susceptibility of its program that was consistent with requirements, including assessing each of the nine required qualitative risk factors. However, CMS stated that it may not report improper payment estimates for the PTC program as required until at least fiscal year 2022 because of the complexity and timing of the process for developing such estimates. As a result, HHS's overall improper payments estimate will continue to be understated, and Congress and others will continue to lack key payment integrity information for monitoring HHS's improper payments. Report


GAO: CMS Should Evaluate Providing Coverage for Disposable Medical Devices That Could Substitute for Durable Medical Equipment

July 2017

Medicare spent $6.7 billion on durable medical equipment (generally, equipment that lasts at least 3 years) in 2015. Companies have developed disposable versions of some of these medical devices, such as insulin pumps, that could act as potential substitutes. GAO found that some of these disposable devices could potentially save money or result in better health outcomes compared to the durable versions in some cases, but they are not covered by Medicare.

If Medicare coverage were expanded to include disposable DME substitutes, CMS would need to consider issues related to benefit category designation. GAO identified three possible options for covering disposable DME substitutes: an expansion of the current DME benefit, an expansion of the current home health benefit, or establishment of a new benefit category. Report


GAO: Hospital Value-Based Purchasing: CMS Should Take Steps to Ensure Lower Quality Hospitals Do Not Qualify for Bonuses

June 2017

The Hospital Value-based Purchasing (HVBP) program aims to improve quality of care and efficiency by creating financial incentives for about 3,000 participating hospitals. From fiscal years 2013 through 2017, performance on quality and efficiency measures varied by hospital type. Safety net hospitals—those that serve a high proportion of low-income patients—generally scored lower in quality compared to all participating hospitals. In contrast, small rural and small urban hospitals—those with 100 or fewer acute care beds—scored higher on efficiency compared to all hospitals.

Payment adjustments—bonuses or penalties, announced prior to each fiscal year—have varied over time for all hospitals. In four out of the five years of GAO's analysis, small rural and small urban hospitals were more likely to receive a bonus compared to all participating hospitals, while safety net hospitals were more likely to receive a penalty. While a majority of all hospitals received a bonus or a penalty of less than 0.5 percent each year, the percentage of hospitals receiving a bonus greater than 0.5 percent increased from 4 percent to 29 percent from fiscal year 2013 to 2017. In dollar terms, most hospitals had a bonus or penalty of less than $100,000 in fiscal year 2017.

Despite the program's intention to reward hospitals that provide high-quality care at a lower cost, we found that some hospitals with low quality scores received bonuses because they had relatively high efficiency scores. Report



GAO: Medicare Paid Hundreds of Millions in Electronic Health Record Incentive Payments That Did Not Comply With Federal Requirements

June 2017

The Health Information Technology for Economic and Clinical Health Act established the Medicare and Medicaid electronic health record (EHR) incentive programs to promote the adoption of EHRs and to improve health care quality, safety, and efficiency through the promotion of health information technology and electronic health information exchange. As an incentive for using certified EHR technology, the Federal Government is making payments to eligible professionals (EPs) and hospitals that attest to the "meaningful use" of EHRs. To receive an incentive payment, EPs attest that they meet program requirements by self-reporting data through the Centers for Medicare & Medicaid Services' (CMS) online system. 

CMS did not always make EHR incentive payments to EPs in accordance with Federal requirements. On the basis of our sample results, we estimated that CMS inappropriately paid $729.4 million (12 percent of the total) in incentive payments to EPs who did not meet meaningful use requirements. These errors occurred because sampled EPs did not maintain support for their attestations. Furthermore, CMS conducted minimal documentation reviews, leaving the self-attestations of the EHR program vulnerable to abuse and misuse of Federal funds. Report


GAO: Medicare Advantage: CMS Should Use Data on Disenrollment and Beneficiary Health Status to Strengthen Oversight

May 2017

Under the Medicare Advantage (MA) program, the Centers for Medicare & Medicaid Services (CMS) contracts with private entities to offer coverage for Medicare beneficiaries. GAO examined 126 contracts with higher disenrollment rates—above the median rate of 10.6 percent in 2014—and found 35 contracts with health-biased disenrollment. In these contracts, beneficiaries in poor health were substantially more likely (on average, 47 percent more likely) to disenroll relative to beneficiaries in better health. Such disparities in contract disenrollment by health status may indicate that the needs of beneficiaries, particularly those in poor health, may not be adequately met. Report


GAO: Medicaid Demonstrations: Federal Action Needed to Improve Oversight of Spending

May 2017

Many states conduct Medicaid demonstrations, which allow them to test new approaches for delivering Medicaid services. The Centers for Medicare & Medicaid Services monitors spending under these demonstrations to ensure that the federal government does not pay more for them than it would have paid for the state's traditional Medicaid program.

GAO found that, over the last decade, Medicaid has spent increasing amounts on these demonstrations. GAO also found inconsistences in how CMS monitors these funds. Report


GAO: Medicaid Program Integrity: CMS Should Build on Current Oversight Efforts by Further Enhancing Collaboration with States

April 2017

The Centers for Medicare & Medicaid Services reviews states' efforts to reduce improper Medicaid payments, and encourages them to use collaborative audits—where CMS contractors and states work together to review the accuracy of payments made. Collaborative audits have identified substantial potential overpayments to providers, but barriers have limited their use. CMS encourages states to use collaborative audits, but states decide whether to pursue them. Several states reported positive collaborative audit experiences, while others cited barriers—such as staff burden or problems communicating with contractors—that prevented them from seeking audits or hindered the success of audits.

GAO also found that CMS lacks a systematic approach to collecting and communicating information about state practices to reduce Medicaid improper payments. Report


GAO: Medicare Provider Education: Oversight of Efforts to Reduce Improper Billing Needs Improvement

April 2017

In 2016, Medicare's fee-for-service program made $41.1 billion in improper payments. To help ensure that payments are made properly, the Centers for Medicare & Medicaid Services contracts with Medicare Administrative Contractors (MACs) to educate health care providers. GAO reviewed these contractors and found issues with CMS's requirements and oversight of them. Report


GAO: Medicaid: CMS Has Taken Steps, but Further Efforts Are Needed to Control Improper Payments

January 2017

Medicaid, a joint federal-state health care program, is a significant component of federal and state budgets, with estimated outlays of $576 billion in fiscal year 2016. The program's size and diversity make it particularly vulnerable to improper payments. In fiscal year 2016, improper payments were an estimated 10.5 percent ($36 billion) of federal Medicaid expenditures, an increase from an estimated 9.8 percent ($29 billion) in fiscal year 2015.

States, which are responsible for the day-to-day administration of the Medicaid program, are the first line of defense against improper payments. Specifically, states must implement federal requirements to ensure the qualifications of the providers who bill the program, detect improper payments, recover overpayments, and refer suspected cases of fraud and abuse to law enforcement authorities. At the federal level, CMS is responsible for supporting and overseeing states' Medicaid program integrity activities.

This testimony highlights key program integrity issues in Medicaid, the progress CMS has made improving its oversight of program integrity, and the related challenges the agency and states continue to face. Report.


GAO: Medicare Advantage: Limited Progress Made to Validate Encounter Data Used to Ensure Proper Payments

January 2017

CMS collects MA encounter data to help ensure the proper use of federal funds by improving risk adjustment in the MA program—the private health plan alternative to traditional Medicare—and for other potential purposes. CMS's ability to make proper payments depends on the completeness and accuracy of MA encounter data. In July 2014, GAO reported that CMS had taken some, but not all, appropriate actions to validate the completeness and accuracy of encounter data and had not fully developed plans for using them.

Since GAO issued its July 2014 report, the Centers for Medicare & Medicaid Services (CMS) within the Department of Health and Human Services (HHS) has made limited progress to validate the completeness and accuracy of Medicare Advantage (MA) encounter data. CMS collects encounter data—detailed information about the care and health status of MA enrollees—to determine payments to MA organizations (MAO). These entities received approximately $170 billion to provide coverage to nearly one-third of all Medicare beneficiaries in 2015. Report




HHS OIG: Hundreds of Millions in Medicare Payments for Chiropractic Services Did Not Comply With Medicare Requirements

October 2016

Most Medicare payments for chiropractic services did not comply with Medicare requirements. On the basis of our sample results, we estimated that $358.8 million, or approximately 82 percent, of the $438.1 million paid by Medicare for chiropractic services was unallowable. These overpayments occurred because CMS's controls were not effective in preventing payments for medically unnecessary chiropractic services. Report


HHS OIG: HHS OIG’s Latest Fiscal Year 2015 Improper Payment Review

May 2016

HHS met many requirements, but did not fully comply with the IPIA, as amended for FY 2015.

The HHS Medicare Fee-For-Service program missed its goal of 10% of improper payments. The 12.1% error rate translates to $43.3 billion in losses. Report

Media Coverage

Yahoo Finance!: CAGW Outraged by HHS OIG’s Latest Improper Payment Review

What A Waste: HHS Throwing Away Billions on Medicare


HHS OIG: Incomplete and Inaccurate Licensure Data Allowed Some Suppliers in Round 2 of the Durable Medical Equipment Competitive Bidding Program That Did Not Have Required Licenses

May 2016

CMS awarded contracts to 63 suppliers that did not meet licensure requirements in at least one competition for which they received a contract under Round 2 of the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Competitive Bidding Program primarily because of incomplete and inaccurate licensure data. Additionally, 14 suppliers need to be further researched by CMS and its contractors to determine if they met or had not met licensure requirements. 

Suppliers received contracts without meeting all licensure requirements because the licensure database that CMS and its contractors used when awarding contracts to suppliers was incomplete and inaccurate. Report.


GAO: Medicare Advantage: Fundamental Improvements Needed in CMS’s Effort to Recover Substantial Amounts of Improper Payments 

April 2016

GAO was asked to review the extent to which CMS is addressing improper payments in the MA program. 

CMS conducts two types of risk adjustment data validation (RADV) audits to identify and correct MA improper payments: national RADV activities and contract-level RADV audits. Based on the most recent national audit, which reviewed 2013 payments, CMS released an Medicare Advantage improper payment estimate of 9.5 percent or $14.1 billion. CMS stated it had recovered about $14 million in improper payments from contract-level RADV audits of 2007 payments and may recover additional amounts depending on the adjudication of appeals filed by MA organizations challenging some of the audit findings. Since 2010, CMS has spent about $117 million on both types of audits. Report.

Media Coverage

Washington Post: Taxpayers covered $14 billion in erroneous charges by private health plans paying for seniors’ care, report says

Center for Public Integrity: Auditors: feds failed to rein in billions in over-billing by Medicare Advantage 


GAO: Medicare Part B Drugs: Action Needed to Reduce Financial Incentives to Prescribe 340B Drugs at Participating Hospitals 

April 2016

Certain providers, including hospitals that serve a disproportionate number of low-income patients, have access to discounted prices on outpatient drugs through the 340B Drug Pricing Program. GAO found that in both 2008 and 2012, per beneficiary Medicare Part B drug spending, including oncology drug spending, was substantially higher at 340B DSH hospitals than at non-340B hospitals. This indicates that, on average, beneficiaries at 340B DSH hospitals were either prescribed more drugs or more expensive drugs than beneficiaries at the other hospitals in GAO's analysis. Report

Media Coverage

AJMCGAO Report: Congress Must End Incentives to Prescribe Expensive Cancer Drugs in 340B Program

Town Hall: Exploiting the Poor: Hospitals and Chain Drug Stores


GAO: Medicare: Opportunities Exist to Recover Potential Overpayments to Providers with Criminal Backgrounds 

April 2016

Opportunities exist for CMS to recover about $1.3 million in potential overpayments to 16 out of 66 potentially ineligible providers with criminal backgrounds who were enrolled in Medicare before CMS implemented more extensive background check processes in April 2014. Report.   


GAO: Medicare Advantage: Action Needed to Ensure Appropriate Payments for Veterans and Nonveterans 

April 2016

In fiscal year 2010, the Department of Veterans Affairs (VA) health care system provided $2.4 billion in inpatient and outpatient services to the 833,684 veterans enrolled in Medicare Advantage (MA), a private plan alternative to Medicare fee- for-service (FFS). These services likely resulted in lower overall payments to MA plans. However, the appropriateness of these lower payments is uncertain, given potential differences in the proportion of services veterans enrolled in MA plans and Medicare FFS receive from VA. Report


GAO: Medicare Advantage: Fundamental Improvements Needed in CMS’s Effort to Recover Substantial Amounts of Improper Payments 

April 2016

GAO was asked to examine the enrollment process and verification controls of the federal Marketplace. 

According to GAO analysis of CMS data, about 431,000 applications from the 2014 enrollment period, with about $1.7 billion in associated subsidies for 2014, still had unresolved inconsistencies as of April 2015—several months after close of the coverage year. In addition, CMS did not resolve Social Security number inconsistencies for about 35,000 applications (with about $154 million in associated subsidies) or incarceration inconsistencies for about 22,000 applications (with about $68 million in associated subsidies). With unresolved inconsistencies, CMS is at risk of granting eligibility to, and making subsidy payments on behalf of, individuals who are ineligible to enroll in qualified health plans. 

During undercover testing, the federal Marketplace approved subsidized coverage under the act for 11 of 12 fictitious GAO phone or online applicants for 2014. The GAO applicants obtained a total of about $30,000 in annual advance premium tax credits, plus eligibility for lower costs at time of service. The fictitious enrollees maintained subsidized coverage throughout 2014, even though GAO sent fictitious documents, or no documents, to resolve application inconsistencies. Report

Media Coverage

Health Journalism: GAO confirms Center for Public Integrity’s findings on Medicare Advantage overspending


GAO: Medicare: Claim Review Programs Could Be Improved with Additional Prepayment Reviews and Better Data 

April 2016

The Centers for Medicare & Medicaid Services (CMS) uses different types of contractors to conduct prepayment and postpayment reviews of Medicare fee- for-service claims at high risk for improper payments. Medicare Administrative Contractors (MAC) conduct prepayment and postpayment reviews; Recovery Auditors (RA) generally conduct postpayment reviews; and the Supplemental Medical Review Contractor (SMRC) conducts postpayment reviews as part of studies directed by CMS.  

In 2013 and 2014, the RAs had an average cost per review to CMS of $158 and identified $14 in improper payments per dollar paid by CMS to the RAs. The SMRC had an average cost per review of $256 and identified $7 in improper payments per dollar paid by CMS. GAO was unable to determine the cost per review and amount of improper payments identified by the MACs per dollar paid by CMS because of unreliable data on costs and claim review savings. Report.


GAO: Medicaid Program Integrity: Improved Guidance Needed to Better Support Efforts to Screen Managed Care Providers 

April 2016

GAO found that the selected states and Medicaid managed care plans face significant challenges in screening providers for eligibility to participate in the Medicaid program. GAO examined approximately 881,000 Medicaid providers in four states and found that in fiscal year 2011 hundreds of these providers were potentially receiving improper Medicaid payments. The providers had suspended or revoked medical licenses, had invalid addresses, were identified as deceased in federal death files, or had been excluded from federal health care programs, including Medicaid. Report

Media Coverage

The Fiscal Times: Medicaid Fraud Climbed to a Whopping $29 Billion Last Year 


HHS OIG: Hospices Inappropriately Billed Medicare Over $250 Million for General Inpatient Care 

March 2016

Hospices billed one-third of general inpatient care (GIP) stays inappropriately, costing Medicare $268 million in 2012. Hospices were more likely to inappropriately bill for GIP provided in skilled nursing facilities than GIP provided in other settings. For-profit hospices were more likely than other hospices to inappropriately bill for GIP. HHS OIG also found that Medicare sometimes paid twice for drugs because they were paid for under Part D when they should have been provided by the hospice and covered under the hospice daily payment rate. Further, hospices did not meet all care planning requirements for 85 percent of GIP stays and sometimes provided poor-quality care. Report

Media Coverage

Washington Examiner: HHS watchdog: One-third of Medicare hospice claims were improper


HHS OIG: Opportunities for Program Improvements Related to States' Withdrawals of Federal Medicaid Funds

March 2016

OIG conducted a series of audits related to States’ withdrawals of Federal Medicaid funds and issued three final reports to the Alabama, Illinois, and Maryland State Medicaid agencies. In the course of these audits, OIG identified systemic issues with the way the States make Federal Medicaid withdrawals that should be communicated to the Centers for Medicare & Medicaid Services (CMS). 

CMS has not issued guidance instructing States on the appropriate extent and timing of Medicaid withdrawals. All three States that OIG audited withdrew more funds than necessary to meet immediate cash needs. At the time of OIG's reviews, Alabama and Maryland had overdrawn more than $130 million in Medicaid funds that they had not refunded to the Federal Government. Although Illinois refunded overdrawn Medicaid funds, its withdrawals exceeded its expenditures by an average of $60 million a quarter. Report.


HHS OIG: Medicare Did Not Pay Selected Inpatient Claims for Bone Marrow and Stem Cell Transplant Procedures in Accordance With Medicare Requirements

February 2016

Medicare did not pay selected inpatient claims for bone marrow and stem cell transplant procedures in accordance with Medicare requirements, resulting in overpayments of $6.3 million over more than 31⁄2 years. 

Medicare paid 10 of 143 selected inpatient claims for bone marrow and stem cell transplant procedures in accordance with Medicare requirements. However, 133 claims did not comply with those requirements. As a result of the 133 errors, Medicare overpaid the hospitals by $6.3 million. Medicare overpaid the hospitals because existing controls were not effective in preventing the overpayments. Report.




GAO: Medicaid Demonstrations: Approval Criteria and Documentation Need to Show How Spending Furthers Medicaid Objectives 

April 2015

Under Medicaid section 1115 demonstrations, the Department of Health and Human Services (HHS) authorized expenditures not otherwise allowed under Medicaid for a range of coverage-related purposes. 

n the 25 reviewed states, HHS approved expenditure authorities for a broad range of purposes beyond Medicaid coverage. Two types of noncoverage-related expenditure authorities were significant in terms of approved spending amounts. In 5 states, HHS approved expenditure authorities allowing the states to spend $9.5 billion in Medicaid funding during their current demonstration approval periods (about 2 to 5 years) to support about 150 state programs that would not otherwise have been eligible for federal Medicaid funding. Report

Media Coverage

The Hill: Watchdog: HHS program lacks transparency


HHS OIG: CMS Could Not Effectively Ensure That Advance Premium Tax Credit Payments Made Under the Affordable Care Act Were Only for Enrollees Who Paid Their Premiums 

December 2015

CMS could not ensure that advance premium tax credit (APTC) payments made to qualified health plan (QHP) issuers were only for enrollees who had paid their premiums. Specifically, OIG found that CMS (1) did not have a process in place to ensure that APTC payments were made only for enrollees who had paid their monthly premiums; instead, CMS relied on each QHP issuer to verify that enrollees paid their monthly premiums and to attest that APTC payment information that the issuer reported to CMS was accurate; and (2) had sole responsibility for ensuring that APTC payments were made only for enrollees who had paid their premiums and did not share these data for enrollees with the IRS when making payments.

OIG determined that CMS's processes limited its ability to ensure that APTC payments made to QHP issuers were only for enrollees who had made their premium payments. Without processes for ensuring that APTC payments are made on behalf of enrollees who had paid their premiums, Federal funds may be at risk. Report

Media Coverage

Fierce Healthcare: OIG calls out ineffective processes for premium tax credit payments


GAO: Medicaid and insurance Exchanges: Additional Federal Controls Needed to Minimize Potential for Gaps and Duplication in Coverage

October 2015

CMS's policies and procedures do not sufficiently minimize the potential for coverage gaps and duplicate coverage in federal exchange states. GAO found that individuals transitioning from Medicaid to exchange coverage—that is, private health insurance purchased through the exchanges created under the Patient Protection and Affordable Care Act (PPACA)—may experience coverage gaps, for example, if they lose Medicaid eligibility toward the end of a month. Individuals who experience coverage gaps may decide to forgo necessary care.

In addition, GAO found that some individuals had duplicate coverage, that is, were enrolled in Medicaid while also receiving federal subsidies for exchange coverage. While some amount of duplicate coverage may be expected during the transition from exchange to Medicaid coverage and is permissible under federal law, GAO found that duplicate coverage was also occurring under other scenarios. Report.  

Media Coverage

NBC News: Obamacare Insurance Markets Still Vulnerable to Fraud, Experts Say


HHS OIG: CMS's Internal Controls Did Not Effectively Ensure the Accuracy of Aggregate Financial Assistance Payments Made to Qualified Health Plan Issuers Under the Affordable Care Act

June 2015

CMS's internal controls did not effectively ensure the accuracy of nearly $2.8 billion in aggregate financial assistance payments made to insurance companies under the Affordable Care Act during the first 4 months that these payments were made.

OIG determined that CMS's internal controls for calculating and authorizing financial assistance payments were not effective. Report

Media Coverage

Town Hall: Keep Working America: The Government Not Exactly Sure Where $3 Billion in Obamacare Subsidies Went


GAO: Medicaid Demonstrations: Approval Criteria and Documentation Need to Show How Spending Furthers Medicaid Objectives

May 2015

HHS approved expenditure authorities for a broad range of purposes beyond Medicaid coverage. Two types of noncoverage-related expenditure authorities were significant in terms of approved spending amounts. In 5 states, HHS approved expenditure authorities allowing the states to spend $9.5 billion in Medicaid funding during their current demonstration approval periods (about 2 to 5 years) to support about 150 state programs that would not otherwise have been eligible for federal Medicaid funding.

Although section 1115 of the Social Security Act provides HHS with broad authority to approve expenditure authorities that, in the Secretary's judgment, are likely to promote Medicaid objectives, HHS has not issued specific criteria for making these determinations. Further, HHS's approval documents are not always clear as to what, precisely, approved expenditures are for and how they will promote Medicaid objectives. Report.


GAO: Medicaid: Additional Actions Needed to Help Improve Provider and Beneficiary Fraud Controls 

May 2015

GAO found thousands of Medicaid beneficiaries and hundreds of providers involved in potential improper or fraudulent payments during fiscal year 2011—the most-recent year for which reliable data were available in four selected states: Arizona, Florida, Michigan, and New Jersey. These states had about 9.2 million beneficiaries and accounted for 13 percent of all fiscal year 2011 Medicaid payments. Specifically:

About 8,600 beneficiaries had payments made on their behalf concurrently by two or more of GAO's selected states totaling at least $18.3 million.

The identities of about 200 deceased beneficiaries received about $9.6 million in Medicaid benefits subsequent to the beneficiary's death.

About 50 providers were excluded from federal health-care programs, including Medicaid, for a variety of reasons that include patient abuse or neglect, fraud, theft, bribery, or tax evasion.

Medicaid is a significant expenditure for the federal government and the states, with total federal outlays of $310 billion in fiscal year 2014. CMS reported an estimated $17.5 billion in potentially improper payments for the Medicaid program in 2014. Report

Media Coverage

Long-Term Living: GAO suggests ways to fight Medicaid fraud, improve Medicare audits


GAO: Medicaid: A Small Share of Enrollees Consistently Accounted for a Large Share of Expenditures

May 2015

A small percentage of Medicaid-only enrollees—that is, those who were not also eligible for Medicare—consistently accounted for a large percentage of total Medicaid expenditures for Medicaid-only enrollees. In each fiscal year from 2009 through 2011, the most expensive 5 percent of Medicaid-only enrollees accounted for almost half of the expenditures for all Medicaid-only enrollees. 

Of the Medicaid-only enrollees who were among the 5 percent with the highest expenditures within each state, the nationwide proportions of these enrollees in different eligibility groups (such as the disabled or children) and with certain conditions (such as asthma) or services (such as childbirth or delivery) were consistent from fiscal years 2009 through 2011. Report.


HHS OIG: CMS Made Payments Associated With Providers After Referring Individual Providers' Debts to the Department of the Treasury for Collection

February 2015

CMS made Medicare and Medicaid payments associated with 23 of 82 individual physicians with delinquent debts after CMS had referred their Medicare debts to the U.S. Department of the Treasury (Treasury) for collection.

Specifically, CMS directly paid 5 individual physicians after having referred their Medicare debts to Treasury, and 21 individual physicians provided services for an entity that received Federal reimbursement. The 23 individual physicians, who collectively owed CMS a total of $8.84 million ($8 million owed by 21 individual physicians that performed services for entities and $42,000 owed by 2 individual physicians that received only direct payments), were paid a total of $10.7 million ($317,000 in direct payments to 5 individual physicians and $10.4 million in payments to entities for services performed by the 21 individual physicians).Report




GAO: Medicare Program Integrity: CMS Pursues Many Practices to Address Prescription Drug Fraud, Waste, and Abuse

October 2014

GAO identified 23 practices for addressing prescription drug fraud, waste, and abuse that fall within three categories based on GAO's Fraud Prevention Framework—prevention, detection and monitoring, and investigation and prosecution.

The Department of Health and Human Services' (HHS) Centers for Medicare & Medicaid Services' (CMS) activities to address prescription drug fraud, waste, and abuse in the Medicare Part D prescription drug program reflect 14 of these 23 identified practices, some of which are in multiple categories, and the agency plans to implement 3 additional practices. Report


GAO: Medicaid: Information on Inmate Eligibility and Federal Costs for Allowable Services

September 2014

In 2013, the Medicaid program financed health care services for more than 72 million individuals, and an additional 7 million beneficiaries are expected to enroll in 2014 as a result of states choosing to expand Medicaid eligibility as allowed under the Patient Protection and Affordable Care Act (PPACA). Most of these newly eligible individuals will be low-income adults, a population that may include individuals who are inmates in state prisons and local jails. In the 27 states that opted to expand Medicaid eligibility as allowed under PPACA, the majority of inmates are likely to have incomes that would qualify them for Medicaid—a circumstance that did not generally exist before 2014, since Medicaid eligibility for adults has generally been limited to certain categories of low-income individuals, such as pregnant women and individuals who are aged or disabled.

GAO was asked to examine information on enrollment and federal Medicaid costs for inmates. This study provides information on the proportion of inmates eligible for Medicaid and state efforts to enroll inmates in Medicaid and obtain federal matching funds for allowable services. Report.


GAO: Prescription Drugs: Comparison of DOD, Medicaid, and Medicare Part D Retail Reimbursement Prices

June 2014

In 2011, federal spending for prescription drugs by DOD, Medicaid, and Medicare Part D totaled $71.2 billion—representing about 85 percent of all federal prescription drug expenditures—for about 114.4 million beneficiaries.

GAO found that Medicaid paid the lowest average net prices across a sample of 78 high-utilization and high-expenditure brand-name and generic drugs when compared to prices paid by the Department of Defense (DOD) and Medicare Part D. Specifically, Medicaid's average net price for the entire sample was $0.62 per unit, while Medicare Part D paid an estimated 32 percent more ($0.82 per unit) and DOD paid 60 percent more ($0.99 per unit). Similarly, Medicaid paid the lowest net price for the subset of brand-name drugs in the sample, while DOD paid 34 percent more and Medicare Part D paid an estimated 69 percent more. Medicaid also paid the lowest net price for the subset of generic drugs, while Medicare Part D paid 4 percent more and DOD paid 50 percent more. Report.


HHS OIG: The Fraud Prevention System Identified Millions in Medicare Savings, but the Department Could Strengthen Savings Data by Improving Its Procedures 

June 2014

The Small Business Jobs Act of 2010 (the Act) requires OIG to certify the actual and projected savings with respect to improper payments recovered and avoided and the return on investment related to the Department's use of the Fraud Prevention System (FPS) for each of its first 3 implementation years. In addition, the Act requires OIG to determine whether the Department should continue, expand, or modify its predictive analytics technologies. This report fulfills OIG's responsibilities for the second implementation year. 

In the second implementation year of the FPS, the Department has complied with the requirements of the Act for reporting actual and projected savings in the Medicare fee-for-service program and the return on investment from the use of predictive analytics technologies. Specifically, we certify that the Department's use of its FPS resulted in $54.2 million of actual and projected savings to the Medicare fee-for-service program and a return on investment of $1.34 for every dollar spent on the FPS. OIG also certifies the $210.7 million in unadjusted savings that the FPS identified. Report.


HHS OIG: Medicare Improperly Paid Providers Millions of Dollars for Entitlement-Terminated Beneficiaries Who Received Services During 2010 Through 2012

April 2014

When CMS's data systems did not indicate until after a claim had been processed that a beneficiary's entitlement to Medicare had been terminated, CMS's controls were not adequate to detect and recoup the improper payment. Because CMS did not always receive information relating to entitlement-terminated beneficiaries in a timely manner, Medicare payments totaling $18.4 million were made to providers for services rendered to 7,426 such beneficiaries during calendar years 2010 through 2012. CMS did not have policies and procedures to review information for these beneficiaries on a postpayment basis that would have detected improper payments that the prepayment edit could not prevent. Consequently, CMS did not notify the Medicare contractors to recoup any of the $18.4 million in improper payments. Report.


HHS OIG: Medicare Improperly Paid Millions of Dollars for Prescription Drugs Provided to Incarcerated Beneficiaries During 2006 Through 2010 

January 2014

An individual is eligible for Medicare Part D benefits if he or she is entitled to Medicare benefits under Part A or enrolled in Part B and lives in the service area of a Part D plan. Federal regulations specify that facilities in which individuals are incarcerated are not to be regarded as being within service areas for purposes of Part D coverage. 

The Centers for Medicare & Medicaid Services (CMS) inappropriately accepted prescription drug event (PDE) records submitted by Part D sponsors for prescription drugs provided to incarcerated beneficiaries and used those records to make its final payment determinations. Specifically, for 49 of the 100 beneficiaries that we sampled, CMS accepted 1,298 PDE records submitted by sponsors for prescription drugs provided to incarcerated beneficiaries. The gross drug costs associated with these 1,298 accepted PDE records totaled $326,000. On the basis of OIG's sample results, OIG estimates that CMS accepted PDE records with gross drug costs totaling an additional $11.7 million for incarcerated beneficiaries. Report

Media Coverage

NewsmaxMedicare Paid Millions for Prescription Drugs to Prisoners




GAO: Medicaid: CMS Should Ensure That States Clearly Report Overpayments

December 2013

States recovered $9.8 million in Medicaid overpayments, but they did not clearly report the overpayments and the return of the federal share to the Centers for Medicare & Medicaid Services (CMS) within the Department of Health and Human Services (HHS). Federal audits initially identified about $20.4 million in potential Medicaid overpayments across the 19 states with identified overpayments from June 2007 through February 2012. Of the $13.3 million in net overpayments, states recovered $9.8 million and were in the process of recovering the remaining $3.5 million. Report

Media Coverage

RAC Monitor: GAO Faults CMS for States’ Reporting Medicaid Overpayments


HHS OIG: Medicare Could Save Millions by Strengthening Billing Requirements for Canceled Elective Surgeries 

August 2013

On the basis of our sample results, we estimated that Medicare made $38.2 million in Part A inpatient hospital payments in calendar years 2009 and 2010 for short-stay, canceled elective surgery admissions that were not reasonable and necessary. For 80 of the 100 claims in our sample, Medicare made payments totaling $346,000 for hospital inpatient claims involving canceled elective surgeries when a clinical condition did not exist on admission or a new condition did not emerge after admission that required inpatient care. Report

Media Coverage

Fierce HealthCare: Revised billing rules for canceled surgeries could save millions




GAO: Medicare Program Integrity: Greater Prepayment Control Efforts Could Increase Savings and Better Ensure Proper Payment

December 2012

Use of prepayment edits saved Medicare at least $1.76 billion in fiscal year 2010, but GAO found that savings could have been greater had prepayment edits been more widely used. GAO identified $14.7 million in payments in fiscal year 2010 that appeared to be inconsistent with four national policies and therefore improper. These payments could have been prevented through automated prepayment edits. GAO also found more than $100 million in payments that were inconsistent with three selected LCDs and that could have been identified using automated edits. Report.


HHS OIG: Obstacles to Collection of Millions in Medicare Overpayments

May 2012

OIG's review focused on overpayments that CMS had made and that OIG had recommended for collection. CMS agreed to collect, or "sustained" these overpayments. We selected OIG audit reports on Medicare with recommendations to collect overpayments greater than $1,000 that were issued during fiscal years (FY) 2007 and 2008 and the first 6 months of FY 2009 to CMS, CMS contractors, or Medicare providers. 

As of October 8, 2010, CMS had not collected the majority of overpayment amounts identified in OIG audit reports. Of the 154 OIG audit reports with sustained overpayment amounts totaling $416.3 million, CMS reported collecting $84.2 million. Of the $84.2 million, CMS reported collecting the full sustained amounts totaling $83.3 million for 113 reports and partial amounts totaling $896,000 for 8 reports. However, for various reasons, CMS did not collect the remaining $332.1 million. CMS's collections were limited because of time constraints imposed by the statute of limitations on overpayment collections. In addition, it did not provide its contractors with adequate guidance for collecting overpayments and did not have an effective system for monitoring its contractors' collection efforts. Report

Media Coverage

Fierce HealthcareOIG: CMS leaves Medicare overpayments on the table