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Improving the traditional Medicare program summary notice system might be a simple way to detect more fraud.

Robert Vito, a regional inspector general at the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG), made that case today at a hearing on Medicare program management organized by the House Energy & Commerce health subcommittee.

Vito talked about two new HHS OIG reports.

In one, investigators concluded that many Medicare Part D prescription drug program carriers either fail to participate in a voluntary fraud and abuse reporting program or participate in a perfunctory way.

In another, investigators found that the Centers for Medicare & Medicaid Services (CMS) typically makes poor use of the compliance reports it gets from Medicare Advantage plans.

Vito also talked about the fact that the U.S. Postal Service returned 4.2 million Medicare summary notices to Medicare administrative contractors (MACs) in 2012.

The MACs — including units of big health insurers and several large benefits administration companies — run the traditional Medicare program for CMS.

When enrollees get the summary notices, they can look for errors and possibly detect signs of provider or administrator abuse or fraud, Vito said, according to a written version of his testimony posted on the Energy & Commerce website.

When investigators looked at 1,445 undelivered notices, they found that the notices described $2.7 million in charges for medical care.

Of those, “51 included paid claims that were associated with beneficiary or provider numbers that had been compromised in some way,” Vito said. “E.g., identity theft.”

In many cases, Vito said, the MACs seem to have wrong enrollee addresses because their systems have trouble pulling the address data from CMS systems.

CMS should give the MACs detailed guidance on how to follow up on undelivered notices and what to do about avoiding the problem with incorrect addresses in the first place, Vito said.

CMS also should get permission from Congress to avoid awarding new contracts to MACs that fail to meet CMS performance requirements, Vito said.

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