A final report released this week by the inspector general's office of the Department of Health and Human Services has found evidence that the Centers for Medicare and Medicaid Services underestimated the amount of improper Medicare claims paid in 2006.
The report suggested that CMS might have manipulated improper payment rate estimates for durable medical equipment to make them appear lower than they really were, according to the offices of Sen. Chuck Grassley, ranking member of the Committee on Finance.
Medicare reported $700 million in improper payments in fiscal 2006, a rate of 7.9 percent, but the recent OIG report by Inspector General Daniel R. Levinson said that, based on data in other Medicare reports, improper spending was probably close to $2.8 billion. This reflects a 29 percent rate of improper claims reporting.
"I'm willing to give CMS some leeway, but this is more than just leeway," said Grassley in response to the draft of the report. "It's a more than 300 percent change in the error rate. When you find such a big discrepancy, you can't help but be mad and feel you've been misled."
The sample size for the OIG's report consisted of 7,955 DME claims valued at $1,213,093 that AdvanceMed, the government's Comprehensive Error Rate Testing contractor, had reviewed in determining the FY 2006 DME error rate. The final sample consisted of 363 DME claims.
Some reports suggested that Medicare had orally instructed AdvanceMed to deviate from written policies by making its determination based on limited medical records available.
To improve the claims auditing process, the OIG recommended that CMS:
- Require the CERT contractor to review all available supplier documentation;
- Establish a written policy to address the appropriate use of clinical inference;
- Require that the CERT contractor review all medical records (including, but not limited to, physicians' records) necessary to determine compliance with applicable requirements on medical necessity;
- Document oral guidance that conflicts with written policies, such as guidance on the need for proof-of-delivery documentation in making medical review determinations;
- Instruct Medicare contractors to provide additional training to physicians focusing on improving their documentation within the medical record to support ordered DME items; and
- Require the CERT contractor to contact the beneficiaries named on high-risk claims, such as claims for power mobility devices, to help determine whether the beneficiaries received these items and whether the items were medically necessary.
In comments included in the draft report, CMS "generally concurred with (the) findings and recommendations and noted that (the) recommendations would expand the CERT review process significantly and would affect the cost of the CERT program and the time required to conduct reviews."
"I gave CMS credit for doing a good job in 2006, and now we find out the numbers are bogus. I want to know what happened, who's responsible, who will be held accountable, and what the Secretary will do about it," Grassley said. "If people cooked the books, manipulated the methodology, or told the contractor to ignore the rules, those individuals need to take the heat."