Congress grills Medicare contractors about oversights
Congress grills Medicare contractors about oversights
By MATTHEW HAY
HHBR Washington Correspondent
WASHINGTON Congress is stepping up its scrutiny of Medicare contractors. At a Sept. 9 hearing, the House Commerce Subcommittee on Oversight and Investigations grilled several Medicare contractors about what steps the Health Care Financing Administration (HCFA; Baltimore) is taking to rein in fraudulent claims processing practices.
George Grob, deputy inspector general at the Health and Human Services’ (Washington) Office of Inspector General (OIG), told the subcommittee that while examples of contractor fraud are often dramatic, contractor financial mismanagement that fails to catch provider fraud is a much greater problem because it is far more pervasive. That observation leads many observers to believe that the OIG’s focus is likely to remain firmly fixed on providers, including home health agencies.
Medicare contractors were paid $1.6 billion in 1998 and process over $700 million in Medicare claims every business day on behalf of HCFA. But the General Accounting Office’s (GAO; Washington) Leslie Aronovitz told the subcommittee that HCFA’s efforts to oversee the activities of Medicare fee-for-service claims administration contractors are still largely inadequate.
"Findings of inappropriate Medicare payments to providers totaling billions of dollars each year have heightened concerns about the program’s management," Aronovitz said. "Cases in which contractors themselves have engaged in improper activities and even defrauded Medicare dramatically compound these concerns."
The subcommittee had planned to question the carriers earlier this summer, but postponed the hearing in July when the Justice Department (Washington) announced that three additional contractors had pleaded guilty to criminal felony counts related to their Medicare business.
At least eight Medicare contractors have been convicted of criminal offenses, been fined, or entered into civil settlements since 1993. More than $235 million in civil and criminal fines have been assessed against six of them.
Improprieties have included improperly screening, processing, and paying Medicare claims, as well as destroying claims and failing to properly collect money owed to Medicare by providers. Some contractors also falsified their performance results and circumvented HCFA performance review.
"Because HCFA gave contractors too much advance notice of its oversight visits and the records that would be reviewed, it often failed to detect improper contractor activities," Aronovitz told the subcommittee. Worse yet, many of those weaknesses persist today, she added.
According to Aronovitz, employees at all levels from directors of operations to staff-level employees have engaged in fraudulent activities over extended periods. "These employees failed to properly conduct claims processing and safeguard activities and then covered up their poor performance by doctoring records that HCFA staff reviewed," she told the subcommittee. "The employees did so because they feared losing their Medicare contracts and their jobs if they did not meet HCFA’s expectations."
Aronovitz told the subcommittee that investigators and former contractor employees have reported that manipulating samples, covering up errors, and "fixing" HCFA-selected records prior to the agency’s review had become a way of life for the three contractors recently targeted. "According to three former contractor employees and investigators in two of the cases, such activities spread as employees at various levels and units taught each other how to commit improprieties," she added.
The GAO made several recommendations to improve HCFA’s oversight of contractors, including a contractor management policy that requires verification that all contractors have effective internal controls as well as systematic validation of contractor-reported data.
The GAO said that annual contractor assessments could also be improved by a comprehensive set of clearly defined and measurable performance standards. It recommended assessing all contractors regularly on core performance standards and reviewing individual contractors on other activities identified by risk assessments.
Finally, the GAO suggested development of annual reports for each contractor that include performance on core standards and other HCFA-assessed standards.
The GAO urged HCFA to designate a unit responsible for evaluating the effectiveness of contractor oversight policy.
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