Bipartisan Effort Seeks to Curb Medicare Fraud and Abuse that Costs Nation Billions Each Year

July 6, 2012

WASHINGTON, DC - In the ongoing effort to fight Medicare fraud, House Energy and Commerce Committee leaders are seeking the annual data collected on fraud investigations and an explanation of procedures employed by three top contractors hired by the Centers for Medicare and Medicaid Services (CMS). Full Committee Chairman Fred Upton (R-MI), Ranking Member Henry A. Waxman (D-CA), Subcommittee on Oversight and Investigations Chairman Cliff Stearns (R-FL), and Subcommittee Ranking Member Diana DeGette (D-CO) today sent letters to AdvanceMed, Health Integrity, and SafeGuard Services, three contractors who are on the frontlines in the effort to prevent, detect, and recover fraudulent payments.

The committee leaders wrote, “On June 8, 2012, the Subcommittee on Oversight and Investigations held a hearing entitled “Medicare Contractors’ Efforts to Fight Fraud - Moving Beyond ‘Pay and Chase’.”  The hearing focused on the performance of Medicare’s program integrity contractors.  At this hearing, the Government Accountability Office (GAO) and the HHS/OIG raised concerns about data collection and reporting by CMS anti-fraud contractors and results that appear to show wide variations in their performance. Further, data provided by CMS to the Committee raises concerns about the adequacy of these contractors in identifying fraudulent payments.  We seek further information to better understand the performance of these contractors and ways to improve the performance.”

Since 1997, CMS has contracted with Program Safeguard Contractors (PSCs) to detect and investigate potential Medicare fraud and abuse in Medicare Parts A and B.  CMS is in the process of transitioning the PSC anti-fraud activities to newly established zone program integrity contractors (ZPICs). During the June 8, 2012, hearing, Robert Vito, HHS Regional Inspector General for Evaluation and Inspections, expressed concerns about CMS’ oversight of its benefit integrity contractors and the effectiveness of the contractors themselves. Vito testified that only a small percentage of estimated fraud is identified by these contractors.  Of what is identified, only a small percentage of that is collected. In 2007, antifraud contractors referred $835 million in overpayments to claim processors for repayment. Of the $835 million referred only 7 percent, or $55 million, was collected.

Setting a July 20, 2012, deadline, the committee leaders are seeking from each contactor data showing for each year since 2007 the number of Medicare fraud investigations initiated, the number referred to law enforcement agencies, the number of overpayments identified, the number of overpayments referred to Medicare Administrative Contractors (MACs), and the number of new payment suspension requests. The leaders are also seeking a description of policies and procedures describing how and when Medicare fraud investigations are initiated as well as how and when leads regarding Medicare fraud are referred to law enforcement agencies. They are also seeking details on how overpayments are identified, and referred to MACs.

View the committee leaders’ full letter HERE.

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