September 14, 2015

GAO Faults CMS for Leaving Part D Money on the Table

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Less than $10 million in improper payments out of a potential $1.9 billion has been collected by the Centers for Medicare & Medicaid Services (CMS) in the Medicare Part D program, according to a report made public yesterday by the Government Accountability Office (GAO). 

In its report, the GAO said that CMS not only collected less than $10 million as of May 2015, but also that the agency had not used the necessary audit methodologies, further faulting CMS for only approving one of the 15 audit proposals from the Recovery Audit Contractor (RAC), ACLR Strategic Business Solutions, since the beginning of the contract in 2011. Both CMS and the RAC are responsible are reducing for overpayments via the program that began in January 2011. 

According to the GAO, $58 billion has been spent by the federal government on the voluntary, outpatient prescription drug coverage program. The GAO estimated that $1.9 billon of this total consisted of improper payments — both underpayments and overpayments, including the possibility of duplicate claim submittals for the same services. 

Having been asked to review CMS’s Part D RAC program, the GAO examined how CMS implemented the program, including the challenges it faced during implementation, but also how CMS had overseen the RAC audit activities and the results of the work being done by the RACs to collect improper payments.

“As a result of CMS's and the RAC’s challenges in determining audit work to conduct and the RAC’s challenges in developing audit methodologies, CMS has approved 1 of the 15 audit proposals from the RAC since the beginning of the contract in 2011 and has collected a limited amount of improper payments relative to the estimated $1.9 billion in improper payments in Part D in 2014,” the GAO’s report read. “With a more effective and efficient process for identifying, reviewing, and approving appropriate new audit work, more audit work would likely have been approved each year of the RAC contract, resulting in more improper payments being identified and collected.”

“An annual performance evaluation would provide CMS with a clear basis for assessing RAC performance in identifying improper payments and provide the RAC with targets against which (they) could compare its performance,” the GAO added in its report.

The GAO noted that the U.S. Department of Health and Human Services (HHS) concurred with the agency’s recommendations.

CMS contracted ACLR Strategic Business Solutions to perform the Part D RAC auditing as part of the Patient Protection and Affordable Care Act (PPACA) legislation enacted in March 2010. Legislation also required CMS to expand the RAC program to the Medicare Part C (Medicare Advantage) program.

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Chuck Buck is the publisher of RACmonitor eNews and is the program host and executive producer of Monitor Mondays.

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Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the program host and executive producer of Monitor Monday.

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