OIG to CMS: Tighten MAC oversight criteria

A new Office of Inspector General report finds the Centers for Medicare & Medicaid Services must change the way it monitors the Medicare Administrative Contractor (MAC) program as MACs failed to meet a quarter of the government's quality assurance standards and didn't have action plans for 12 percent of these unmet standards.

The study set out to determine the extent to which MACs met CMS performance requirements and adequately processed claims and the extent of CMS' assessment and monitoring of MACs. The OIG reviewed two performance periods for 13 MACs that began September 2008 and ended August 2011.

Although MACs met the majority of the 1,201 quality assurance standards, the OIG report reveals they failed to meet 310, or 26 percent, of these standards. Furthermore, MACs failed to resolve 83, or 27 percent, of those unmet standards and CMS didn't require action plans for 12 percent of the unmet standards. According to the report, unmet standards without action plans were almost four times more likely to have issues go unresolved. The OIG also found that two MACs consistently underperformed across various CMS reviews. These reviews were extensive, but not always completed in a timely manner, according to the report.

The report noted CMS has limited ability to solicit and award new contracts under the current time frame when MACs fail to meet the agency's requirements.

As a result, the OIG recommends CMS take the following steps to strengthen the monitoring of the program:

  • Require action plans for all quality assurance standards not met;
  • Use results of quality assurance reviews to select award fee metrics to review;
  • Meet timeframes for completing quality assurance reports and award fee determinations;
  • Set reasonable time frames for issuing contractor performance reports; and
  • Seek legislative change to increase the time between MAC contract competitions to give CMS more flexibility in awarding new contracts when MACs fail to meet CMS requirements.

CMS concurred with all recommendations, according to the OIG.

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