GAO: Medicare fraud hunters may converge on same providers

The Centers for Medicare & Medicaid Services (CMS) are still not very good about keeping its claim investigation contractors from going after the same providers.

Officials from the U.S. Government Accountability Office (GAO) give that assessment in a new report on Medicare claim review contractor oversight. The GAO looked CMS efforts to manage four types of “post-payment review” contractors that help police the traditional Medicare program claims: 

• Medicare administrative contractors (MACs): The companies that handle everyday Medicare claim processing.
• Comprehensive Error Rate Testing Contractors (CERTs): Companies that review the claims used to estimate Medicare’s improper payment rate.
• Zone Program Integrity Contractors (ZPICs): Companies that investigate potential Medicare fraud.
• Recovery audit contractors (RACs): Companies that find underpayments and overpayments missed by other contractors.

The MACs, CERTs and ZPICs get ordinary government service contracts. The RACs get contingency fees. They get a percentage of any underpayments and overpayments they locate. Critics of the RACs, especially, say the RACs are the financial equivalent of bounty hunters — free-lance workers who bring fugitives to law enforcement agencies in exchange for cash rewards.

GAO investigators interviewed representatives from 11 post-payment review contractors and looked at a sample of the contractors’ letters to see how well the contractors were complying with CMS rules.

CMS does have a database that’s supposed to keep RACs from converging on the same providers, but the database does not work very well, in part because some RACs do a poor job of putting their work into the database, GAO officials say.