A recent study by the Government Accountability Office offers five key strategies to reduce fraud and waste in the Medicare and Medicaid programs. The study outlines various GAO recommendations and provisions in recently enacted laws to carry out these strategies.
The GAO pursued the study, "Medicare and Medicaid Fraud, Waste, and Abuse: Effective Implementation of Recent Laws and Agency Actions Could Help Reduce Improper Payments," due to the high-risk nature of the programs because of their vulnerability to fraud and abuse. A previous study by the GAO, completed in 2010, estimated that CMS has made a total of $70 billion in improper payments.
The five strategies include:
The GAO pursued the study, "Medicare and Medicaid Fraud, Waste, and Abuse: Effective Implementation of Recent Laws and Agency Actions Could Help Reduce Improper Payments," due to the high-risk nature of the programs because of their vulnerability to fraud and abuse. A previous study by the GAO, completed in 2010, estimated that CMS has made a total of $70 billion in improper payments.
The five strategies include:
"1. Strengthening provider enrollment standards and procedures. Strengthening the standards and procedures for provider enrollment can help reduce the risk of enrolling entities intent on defrauding the program. The Patient Protection and Affordable Care Act as amended strengthens aspects of provider enrollment in Medicare and Medicaid. CMS is implementing these provisions, which include designating providers by levels of risk and providing more stringent review of high-risk providers.
2. Improving prepayment review of claims. Prepayment reviews of claims help ensure that Medicare pays correctly the first time. CMS is implementing a PPACA provision requiring states to add automated prepayment controls in their Medicaid programs. In addition, CMS is seeking contractors to apply predictive modeling analysis to claims as a way to develop new prepayment controls to add to Medicare; however, CMS has not implemented certain GAO recommendations related to prepayment review.
3. Focusing post-payment claims review on most vulnerable areas. Post-payment reviews are critical to identifying payment errors and recouping overpayments. CMS is instituting recovery audit contractor (RAC) programs in Medicare and Medicaid to increase post-payment review. However, CMS contractors generally choose their focus for claims review, and GAO continues to contend that CMS should make it a priority to focus claims administration contractors' post-payment review on the most vulnerable areas.
4. Improving oversight of contractors. CMS's oversight of contractors' activities to address fraud, waste, and abuse is critical. CMS has taken action to address GAO recommendations to improve oversight of prescription drug plan sponsors’ fraud and abuse programs and to comply with other contractor oversight provisions in PPACA.
5. Developing a robust process for addressing identified vulnerabilities. Having mechanisms in place to resolve vulnerabilities that lead to improper payment is critical, but CMS has not developed a robust corrective action process for vulnerabilities identified by Medicare RACs, and has not fully implemented GAO recommendations to improve it. Further, CMS's guidance to states on Medicaid RAC programs did not include steps to address vulnerabilities through a corrective action process." (Highlights of GAO-11-409T)
Read more coverage on the GAO and Medicare, Medicaid fraud and abuse:
- GAO Report Finds Tens of Thousands of Cases of Medicaid Fraud in Five States