OIG: ‘High amounts of improper payments may continue’

Wednesday, September 4, 2013

WASHINGTON – A new report from the Office of Inspector General (OIG) says that while CMS took corrective actions to address the majority of the vulnerabilities it identified, the agency did not evaluate the effectiveness of these actions.

“As a result, high amounts of improper payments may continue,” the report states.

The OIG found that, of 2.6 million claims reviewed in 2010 and 2011, the RACs identified 1.3 million as having improper payments—at a cost of $1.3 billion.

During those two years, the OIG found that CMS identified 46 vulnerabilities resulting in improper payments, with the majority of them (26 out 46) occurring in Medicare Part B. Vulnerabilities included providers billing add-on codes without primary codes or indicating the incorrect place of service.

The OIG found that, by June 2012, CMS took corrective actions to address 28 of the vulnerabilities, which addressed $1.86 billion of the improper payments. Corrective actions included contractor technical direction letters, computerized edits and quarterly education letters.

But the OIG also found that, by that same date, CMS had not evaluated the effectiveness of its corrective actions.

CMS blamed a lack of resources and the difficulty of determining relationships between corrective actions and reductions in improper payments. The agency also stated that some corrective actions need to be in place for several years before it evaluates them.

The OIG also criticized CMS for not implementing metrics to evaluate the performance of the RACs on all contract requirements.

CMS concurred with the OIG’s recommendations that it take appropriate action on vulnerabilities that are pending corrective action and evaluate the effectiveness of corrective actions; ensure that RACs refer all cases of potential fraud; and develop additional performance evaluation metrics of the RACs.

The agency did not say whether it concurred with a recommendation to take appropriate action on RAC referrals of potential fraud.