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GAO Determines That CMS’ Lack of Information and Performance Measurements Increased Improper Billing

Posted on Thursday, April 13, 2017 1:30 PM

A new Government Accountability Office (GAO) report will provide insight on the failure on the part of the Centers for Medicare and Medicaid Services (CMS) to require that Medicare Administrative Contractors (MACs) educate referring providers in relation to home health care and durable medical equipment (DME).

Due to problems with oversight and contracts, the Medicare Fee-for-Service Program made incorrect payments of $41.1 billion in 2016. Therefore, the GAO report paid close attention to MAC procedures, CMS documents, along with MAC documents and provider education from 2013 to 2016.

According to the report, CMS has very limited oversight of the MACs and the result is improper payments to the tune of billions of dollars.

“The absence of a requirement for MACs to educate referring providers about proper documentation for DME and home health claims is inconsistent with federal internal control standards, which state that in order to achieve an entity's objectives, management should assign responsibility and delegate authority,” the GAO reported.

“Without an explicit requirement from CMS to educate these referring providers, billing errors due to insufficient documentation may persist.”

The GAO report determined that CMS’s absence of information and performance measurements lead to an increase in improper billing.

“The MACs’ provider education departments play an important role in reducing the rate of improper payments by educating Medicare providers on coverage and payment policies so that they can bill properly,” wrote the GAO.

“However, CMS has missed opportunities to improve the effectiveness and its oversight of those efforts. CMS needs sufficient reporting from the MACs to determine if their provider education department efforts are focusing on areas vulnerable to improper billing.”

The following changes are recommended by the GAO report:
• CMS should require detail in MAC reporting that allows CMS to determine if MACs' provider education department efforts focus on areas identified as susceptible to improper billing
• CMS should require that Medicare Part A and B claims, DME, and home health and hospice MACs educate referring providers on documentation requirements for DME and home health services
• CMS should evaluate performance metrics to help the agency determine the reviews' efficiency in reducing improper billing

Throughout the analysis, the MAC reviews main focus included short-stay hospital and home health claims.

Once the agency confirms the actions that will be taken in response to the recommendations, the GAO will provide an update on that information.

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