Life Science Compliance Update

December 30, 2013

HHS Duplicative Databases Slows Enforcement Efforts

The Government Accountability Office (GAO) published a report highlighting the important role oversight and law enforcement agencies play in eliminating fraud, waste, and abuse.

The report found "more than $300 million in duplicative IT systems at three different government agencies, including the U.S. Department of Health & Human Services--which has six duplicative systems costing $256 million alone," reported FierceHealthIT. The six potentially duplicative investments at HHS include four investments that support enterprise information security and two for Medicare coverage determination, according to GAO.

"With so much money on the line, it is critical that our government agencies are doing everything possible to save taxpayer money," Sen. Tom Carper (D-Del.), chairman of the Senate's Homeland Security Committee, said in a statement. "An important part of this effort is to ensure that we are not investing in programs that unnecessarily overlap or are duplicative."

In January 2013, GAO, the Council of the Inspectors General on Integrity and Efficiency, and the Recovery Accountability and Transparency Board convened a forum with the purpose of exploring ways in which oversight and law enforcement agencies use data analytics to assist in the prevention and detection of fraud, waste, and abuse, as well as identifying the most-significant challenges to realizing the potential of data analytics and actions that the government can take to address these challenges. HHS OIG played a significant role in helping plan and conduct this forum.

The report summarizes the key themes that emerged from the discussion in the forum. Specifically, the report discusses the challenges and opportunities in (1) accessing and using data and (2) sharing data. In addition, participants identified next steps to address these challenges and capitalize on opportunities.

Though participants pointed to the Center for Medicare & Medicaid Services' (CMS) Fraud Prevention System as an example of harnessing data through predictive modeling and other analytics, the report says of government efforts overall, that "despite these efforts, the path to capitalizing on the potential of data analytics is not a clear one."

Participants said they're not always aware of all the data sources available for addressing fraud, that they'd like to see a database of known offenders and also pointed out that government program offices lack incentives to develop IT systems useful in oversight efforts, reported FierceHealthIT. They cited other challenges including:

  • An overwhelming amount of available data and difficulties setting priorities
  • The various legal implications of owning and maintaining data, including an array of regulations such as Freedom of Information Act disclosure requirements, HIPAA and others
  • Difficulty measuring the success of analytics programs

Participants also said that federal and state government agencies are not working from a single set of data standards, which makes integrating systems and interpreting the various data elements difficult. Among the lessons learned, participants said that:

  • Having analytics tools isn't enough; it's crucial to have well-trained staff to perform data analysis, identify high-quality investigative leads and areas of greatest risk
  • Building support for analytics from top management down also is essential
  • Data and analytics operations must be consolidated into one location to enhance effectiveness and return on investment
  • Parties responsible for retaining and maintaining databases must be identified to ensure proper safeguards are in place to protect privacy

The forum proposed actions including:

  • Addressing statutory challenges related to data access and use
  • Developing an ongoing community of practice focused on data-sharing challenges
  • Compiling a library of available open-source data analytics, modules, and tools

HHS officials disagreed that its information security investments were duplicative, but nonetheless plan to review them this month to "identify opportunities for consolidation." As for the Medicare coverage determination investments? HHS officials noted that they have "consolidated several functions but could not provide documented justification for why the other functions were not consolidated."


June 13, 2012

GAO Reports Vulnerabilities in CMS Payment Oversight

Data Problems
In 2011, CMS estimated that Medicaid and Medicare had improper payments of $21.9 billion and almost $43 billion, respectively—among the largest for all federal programs. Both health care programs are on GAO’s list of high-risk programs.  Over the years, Congress has passed legislation designed to help address program integrity issues in the two programs but they remain vulnerable to fraud, waste, and abuse. 

The Patient Protection and Affordable Care Act (PPACA) also included several provisions aimed at strengthening Medicaid provider enrollment standards and procedures.  For example, PPACA required states to conduct certain provider screening procedures, such as verifying provider licenses and terminating individuals or entities from Medicaid participation under certain circumstances. 

A recent report from the Office Government Accounting Office (GAO) recognized that although the Centers for Medicare and Medicaid Services have taken certain actions to help fight fraud, waste and abuse, “other actions remain undone.” 

In addition to the report, testimony was recently given by Ann Maxewell, Regional Inspector General for the Office of Evaluations and Inspections of OIG, before the House Committee on Oversight and Government Reform: Subcommittee on Government Organization, Efficiency and Financial Management.   Other testimony was presented by Robert A. Vito, also a Regional Inspector General. 

Maxwell’s testimony was based on several evaluations recently issued by OIG that focused on two national Medicaid integrity programs intended to augment States’ efforts to protect Medicaid from fraud, waste, and abuse.  OIG’s work revealed that these programs are not effectively accomplishing their missions. 

A primary objective for both programs is to identify improper payments for recovery. However, both programs had low findings of actual overpayments and, as a result, yielded negative returns on investment.  These programs also delivered very few referrals of potential fraud to OIG and our law enforcement partners. In many ways, these programs resemble a funnel through which significant Federal and State resources are being poured in and limited results are trickling out. 

GAO Report 

GAO focused on four key strategies and recommendations that were designed to facilitate them that were identified in prior work and that could help reduce improper payments: (1) strengthening provider enrollment standards and procedures to ensure that only legitimate providers participate in the program; (2) improving prepayment controls; (3) improving postpayment claims review and recovery of improper payments; and (4) developing a robust process for addressing identified vulnerabilities. This statement is based on CMS products issued from April 2004 through May 2012 and interviews with agency officials and other stakeholders. 

For the Medicaid program, CMS and the states have taken actions related to GAO’s four key strategies but more needs to be done. 

  • CMS’s comprehensive state program integrity reviews identified provider enrollment as the most frequently cited area of concern but the agency has noted a positive trend in states’ awareness of regulatory requirements.
  • CMS noted vulnerabilities in the prepayment reviews of claims in five states and effective practices in seven others. In anticipation of new analytic tools to predict vulnerabilities before claims are paid, the agency has initiated discussions with and provided guidance to states.
  • CMS has begun collaborating with states to identify targets for federal postpayment audits, which should help to avoid duplication of federal and state audit efforts.
  • CMS has not established a robust process for states to evaluate and address vulnerabilities identified by the states’ new recovery audit contractors brought in to identify improper payments and recoup overpayments.  

For the Medicare program, CMS has acted to strengthen several of its strategies to better ensure program integrity, but other actions remain undone. 

  • Congress authorized CMS to implement several new or improved enrollment safeguards, including screening enrollment applications for categories of Medicare providers by risk level. CMS has issued a final rule to implement this and other changes, but has not completed other final rules and additional actions that could further strengthen enrollment procedures, such as rules to implement new surety bond provisions and provider and supplier disclosures.
  • GAO’s prior work found certain gaps in Medicare’s prepayment edits based on coverage and payment policies and made recommendations for improvement, such as adding edits to identify abnormally rapid increases in medical equipment billing. GAO is currently evaluating new CMS efforts in this area.
  • CMS has begun using recovery auditing in its prescription drug program but not for its Medicare managed care plans.
  • GAO recommended that CMS establish an adequate process to ensure prompt resolution of identified vulnerabilities in Medicare and is currently evaluating steps that CMS has taken recently.


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