GAO report criticizes TRICARE's medical claims review

A new report released last week by the Government Accountability Office indicates that the Defense Health Agency (DHA) within the Department of Defense (DOD) could take a cue from the Centers for Medicare & Medicaid Services (CMS) in developing a better system for eliminating overpayments in the military health program, TRICARE.

The GAO set out to compare overpayments for both Medicare and TRICARE, but found that each health plan had a different process for uncovering improper payments. According to the report, approximately $68 million of TRICARE's $21 billion budget were tagged as improper payments. Although this translates to an error rate significantly less that Medicare (0.3 percent versus 10.1 percent), the GAO found that TRICARE's process does not examine medical record documentation, and the estimated figure is likely understated compared to the more comprehensive methodology utilized by CMS.

"TRICARE and Medicare are at similar risk for improper payments because both health care programs pay providers on a fee-for-service basis, the programs' providers overlap, both programs depend on contractors to process and pay claims, and TRICARE uses some of Medicare's coverage and payment policies," the report stated. "However, DHA does not have as robust an approach to measuring improper payments in the TRICARE program as CMS has for the Medicare program."

Like CMS, the DHA evaluates a sample of the programs claims that are filtered through contractors. Unlike CMS, DHA does not review the medical record associated with the claim to ensure payment was supported with the appropriate medical care.

By neglecting to review the medical documentation, DHA is unable to identify unnecessary medical services and is instead limited to contractor noncompliance--a less comprehensive approach that constrains the agency's ability to address root causes and develop appropriate corrective action. Instead, the GAO recommended that DHA adopt a methodology similar the one CMS uses to identify improper payments within Medicare.

Last September, a clinical psychologist settled for $86,000 for inappropriately billing TRICARE for administrative services. In 2013, Shands Healthcare paid $26 million to settle allegations that it billed Medicare, Medicaid and TRICARE for inpatient services that should have been classified as outpatient claims.

The GAO report pointed specifically to new rules adopted by CMS in 2013 regarding payments that could have been provided in less intensive settings. CMS would not have been able such issues to identify without reviewing medical files, GAO said.

For more:
- here's the GAO report