Grassley leery of CMS contractor conflicts of interest

Sen. Charles Grassley (R-Iowa) is back to pounding on Medicare's door for answers. Last Friday, he shot off another letter to CMS Administrator Dr. Donald Berwick, focusing on possible conflicts of interest among Medicare contractors that conduct fraud investigations.

Grassley's concern is that contractors that investigate for fraud are also subsidiaries of parent companies that have contracts with CMS. In a letter dated Oct. 29, 2010, he includes a chart that contains contractors in just that position. For example, Cahaba Safeguard Administrators, LLC, is a subsidiary of Blue Cross & Blue Shield of Alabama, a Medicare Administrative Contractor.

Grassley wrote that it's unclear whether several subsidiaries are ever placed in the position of having to evaluate their parents companies or affiliates, or vice versa. "However, the potential financial conflicts of interest created by the organizational relationships between certain CMS contractors raise questions about whether or not some [Zone Program Integrity Contractors] and [Program Safeguard Contractors] can effectively carry out their contractual responsibilities, especially with respect to their parent companies or affiliates, for the benefit of the U.S. taxpayer," Grassley wrote.

As a result, he called on CMS to clarify all steps it has taken to ensure that all possible financial conflicts of interest between PSCs or ZPICs and other companies doing business with CMS were identified. He also asked for copies of any documentation by CMS that identified financial conflicts, all companies involved, and CMS's determination for allowing the PSC/ZPIC contract award.

PSCs and ZPICs are supposed to refer suspected fraud to law enforcement and perform data analysis to identify trends and billing patterns that point to faked billing.

To learn more:
- read Sen. Charles Grassley's letter to CMS

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