The Centers for Medicare and Medicaid Services must do a better job of measuring the effectiveness of its fraud and abuse abatement, the Government Accountability Office says in a new report.

The GAO says that proper measurement tools are important if CMS is to make a significant dent in the estimated $48 billion in improper payments it makes annually, or approximately 10% of the total Medicare expenditures of approximately $500 billion.

GAO says that through an analysis of CMS’ budget and other documents, and through interviews with CMS officials, it has learned that CMS uses the return on investment method to measure the effectiveness of Medicare Integrity Program (MIP) activities.

But, GAO says, CMS’ key problem in appropriately measuring its fraud and abuse detection system is that its managers have not “clearly communicated” to its staff the relationship between the daily work of conducting so-called “medical integrity program” activities, as measured by the ROI standard, and the agency’s improper payment reduction performance goals.

Instead, GAO says, CMS managers used other measures of determining the effectiveness of its fraud abatement programs.

The MIP is designed to identify and address fraud, waste, and abuse, which the GAO said are all causes of improper payments.

The report notes that CMS efforts to root out fraud and abuse have steadily climbed since 2006, to the current $1 billion in fiscal 2010 from $832 billion in fiscal 2006.

The GAO report says the additional funding supported oversight of Medicare Part C (Medicare benefits managed through private plans), Part D (the outpatient prescription drug benefit) and agency efforts to examine the claims of Medicare beneficiaries who also participate in Medicaid.

CMS officials told GAO that CMS was able to move some funding from activities, such as provider audit, to other activities because of savings achieved from consolidating contractors.

“The largest percentage increase from this redistribution went to benefit fraud abatement activities, which aim to deter and detect Medicare fraud through proactive data analysis and coordination with law enforcement, GAO says.