Verma: CMS Has A Long Way To Go To Improve Medicare Program Integrity

Verma: CMS Has A Long Way To Go To Improve Medicare Program Integrity

CMS Administrator Seema Verma said the agency has a long way to go to prevent Medicare waste, fraud and abuse, and pointed to the small percentage of claims that Medicare reviews, though Center for Program Integrity Director Alec Alexander recently touted Medicare’s falling improper pay rate before a House Ways & Means panel.

Some providers and one beneficiary advocate raised concerns that Verma’s remarks could indicate a coming uptick in the number of claims audited by Medicare. Some also raised concerns about the effect a program integrity crackdown could have on the Medicare appeals backlog.

The Medicare fee-for-service improper pay rate fell from 11 percent in 2016 to 9.5 percent in 2017, Alexander told the House Ways & Means oversight subcommittee during a recent hearing on preventing waste, fraud and abuse in Medicare. That represents almost $5 billion fewer improper payments. The government’s payment accuracy website says the decrease was driven by a reduction in improper pay for home health and inpatient rehabilitation facility claims.

Alexander, however, said most improper pay is not fraud and that under Verma’s leadership CMS is re-examining existing corrective actions and exploring new, innovative approaches to reducing improper pay while minimizing provider burden.

Seto Bagdoyan, the director of forensic audits and investigative services at the Government Accountability Office, testified that CMS had not conducted a fraud risk assessment or designed and implemented a risk-based anti-fraud strategy for Medicare as defined in GAO’s framework for managing fraud risks. However, his written testimony says that CMS has taken steps to identify fraud risks and established monitoring and evaluation mechanisms for program integrity activities that, if aligned with an anti-fraud strategy, could improve the effectiveness of fraud risk management in Medicare.

Alexander said CMS appreciates GAO’s framework, and the agency is “strengthening our efforts to ingrain fraud-risk assessment principles throughout the agency to cultivate a culture of program integrity and to ensure that this critical work does not occur in a silo.” He also said CMS will work with GAO as the agency expands its capacity to conduct fraud risk assessments and make the process more standardized and efficient.

Verma on Wednesday (July 25) said CMS hopes to improve its program integrity oversight.

“Due to its sheer size, our programs are always vulnerable to fraud, waste, and abuse. However, as the nation’s largest healthcare payer we have a long way to go to preventing it,” Verma said.

She said CMS needs to learn from the private sector to be more efficient, noting commercial payers review claims for services before and after the claim is paid. Medicare, in contrast, reviews “less than 3/10 of 1 percent of the nearly 1.5 billion Medicare claims,” which she said is the bad news.

“The good news is the Trump administration prides itself in fulfilling promises, and this president has promised in both his public statements and in his budget to make the preservation and strengthening of Medicare a top priority. We cannot continue to settle for the wrong path,” Verma said.

The Council for Medicare Integrity, which represents Recovery Auditors, said no claims are restricted from review and there are no artificial limitations on the volume of claims reviewed by commercial payers.

“The Council for Medicare Integrity certainly agrees with CMS Administrator Verma and has consistently recommended that the agency expand Medicare post-payment claim reviews to recover much-needed program funds spent in error, while also adding new prepayment claim reviews to prevent resources from leaving the program improperly. We look forward to the opportunity to work with both CMS and Members of Congress to leverage private sector best practices to expand Medicare integrity efforts and reduce wasteful program spending,” a spokesperson for the council said.

A durable medical equipment lobbyist said Medicare is a bigger auditor for the sector than private plans, though managed care uses prior authorization more often so there is less of a need to audit claims. The lobbyist also said statistical analysis could give an accurate representation of improper pay rates, so increasing the volume of audits wouldn’t change the results.

A beneficiary advocate said Verma’s comment raises concerns that upcoming CMS oversight could hurt beneficiaries’ access to services that are covered by Medicare and medically necessary. The advocate said experience with the RACs has shown that aggressive auditing often has a chilling effect on the provision of such covered services.

Bill Dombi, president of the National Association for Home Care and Hospice, said Verma’s views are already impacting home health agencies with the return of the pre-claim review demonstration.

“We are concerned that CMS will expand claim audits throughout Medicare, including home health and hospice. For years, the CMS CERT reviews have shown that ‘improper payments’ are due to documentation issues. This is not evidence of fraud, waste, or abuse. Instead, it shows that Medicare paperwork requirements confuse and confound health care providers. We hope that the interest CMS has shown in ‘patients over paperwork’ leads to claim documentation requirement refinement as the first action to address any concerns with Medicare claims,” Dombi said.

Mike Cheek, senior vice president of reimbursement policy at the American Health Care Association, said nursing homes support Verma’s efforts to prevent waste and uncover fraud and abuse, and share with the agency the goal of improved administration efficiency.

“The current appeals backlog has created an inefficient operating environment with lengthy wait times leading to revenue management issues for long term care providers,” Cheek said.

The DME lobbyist said CMS needs to look at the overturn rate of appeals before increasing audits. According to the Office of Medicare Hearings and Appeals, 25.1 percent of appeals decisions in fiscal 2018 were favorable, 30.9 percent were unfavorable, and 42.5 percent were dismissed. Until the appeals backlog is under control, it would be inappropriate to add more audits, the lobbyist said.

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