CMS inaction leaves system holes for fraud, abuse

The Centers for Medicare & Medicaid Services (CMS) has been slow to respond to contractor-identified weaknesses in the system that allow for fraud, waste and abuse, according to a report by the Office of Inspector General (OIG), issued Friday. CMS needs to take prompt action to fix potential leaks in the system, the OIG recommended.

As of January, CMS has not resolved or taken action on more than three-fourths (77 percent) of identified vulnerabilities--mostly having to do with coding/billing and provider identifiers--reported by Program Safeguard Contractors, Zone Program Integrity Contractors and Medicare Drug Integrity Contractors in 2009. Out of the 62 vulnerabilities, CMS has not resolved 48 of them, according to the OIG report. CMS said 20 of them are "currently under review," and three require more analysis. OIG determined that CMS either didn't take action or took insufficient action in the remaining 25 identified weaknesses, but the federal agency did take action on 14 of the total 62 potential vulnerabilities.

CMS' inaction on these vulnerabilities could cost $1.2 billion, according to contractors who reported the financial impact for only a third of the vulnerabilities.

"Because monetary impact was reported inconsistently or not at all, the actual monetary impact of the vulnerabilities reported in 2009 could be significantly greater than $1.2 billion," the OIG report states.

CMS noted that it's labor intensive for contractors to determine the dollars at risk for all vulnerabilities and not all vulnerabilities have a monetary impact.

Although CMS has started to develop procedures to consistently track and review vulnerabilities, it still lacks procedures to ensure they are resolved, according to OIG. Contractors have been submitting vulnerability reports for several years, but CMS did not begin developing procedures until June 2010.

CMS stated that it continues to actively manage reported vulnerability on a monthly basis and that it can establish time frames for resolution on a case-by-case basis.

To learn more:
- here's the OIG press release
- read the OIG report (.pdf)

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