Senators Highlight Recent GAO Reports Detailing Vulnerabilities to Waste and Fraud in Medicare, Medicaid

WASHINGTON – Today, Sens. Tom Carper (D-Del.), Tom Coburn (R-Okla.) and Scott Brown (R-Mass.) highlighted two recent Government Accountability Office (GAO) reports that show progress, yet identify ongoing vulnerabilities in the oversight systems that identify waste and fraud within Medicare and Medicaid. 

The first report, Medicaid Integrity Program: CMS Should Take Steps to Eliminate Duplication and Improve Efficiency, requested by Sens. Carper, Scott Brown and Coburn, examined the Centers for Medicare and Medicaid Services’ (CMS) Medicaid Integrity Group, created in 2005 to oversee and support state program integrity activities to curb waste and fraud. The report found that the Medicare Integrity Group’s National Medicaid Audit Program (NMAP) was inefficient and led to duplication of key duties performed by both the contractors and CMS employees.  A hearing chaired by Senator Carper in June found that the inefficiency and duplication resulted in CMS only able to identify about $20 million in improper payments, despite investments totaling more than $100 million. GAO also found that one oversight program, state program integrity assessments (SPIA), was both ineffective and duplicative of other Medicaid oversight activities, and recommends ending the program in order to retarget scarce oversight resources.  Also, the GAO showed successful oversight efforts, including training provided to state officials through the Medicaid Integrity Institute. Finally, GAO recommends that the CMS Administrator eliminate duplication by merging contractor functions and employ comprehensive reviews to better target audits.

In the second report, Medicare Program Integrity: Greater Prepayment Control Efforts Could Increase Savings and Better Ensure Proper Payment, requested by Sens. Carper, Brown, and John McCain (D-Ariz.), GAO noted that the use of prepayment screening “edits” saved Medicare at least $1.76 billion in fiscal year 2010 by preventing waste and fraud, but found as much as $100 million in additional improper payments that should have been identified.  The GAO found that improved pre-payment screening of Medicare claims could curb improper payments based on a more complete analysis of vulnerabilities to improper payment; better enforced time frames for implementing corrective actions; and sharing of prepayment review techniques and rules among the contractors hired by CMS to handle claim payments. GAO recommends that CMS take seven actions to strengthen its use of prepayment edits and noted CMS’s plans to address the problems detailed in the report.

“We have a moral imperative to ensure that both present and future Medicare and Medicaid beneficiaries continue to have access to quality care,” said Sen. Tom Carper, Chairman of the Subcommittee on Federal Financial Management. “At the same time, we must also ensure that the scarce taxpayer resources we invest in this critical healthcare safety net are being spent as effectively as possible. While the Centers for Medicare and Medicaid Services (CMS) has made important strides in recent years in its efforts to root out waste, fraud, and abuse within Medicare and Medicaid, there’s still more work to do. These latest Government Accountability Office (GAO) reports lay out some specific changes to Medicare and Medicaid that can help save taxpayers millions of dollars by improving oversight to identify, and ultimately prevent, fraudulent and wasteful Medicare and Medicaid payments. Adopting these common sense measures will curb the number of mistaken payments within Medicare and Medicaid, while also reducing the burden of audits for state governments and healthcare providers. With so many taxpayer dollars at stake, it is critical that we make sure we take the appropriate steps to address the vulnerabilities in Medicare and Medicaid highlighted by these reports and do what we can to further reduce waste and fraud and improve efficiency and effectiveness of these essential programs. I am counting on Medicare and Medicaid officials to build on successful efficiency efforts and improve the performance of those initiatives that aren’t as successful as they should be. I will keep working with the Administration and my Congressional colleagues to continue to make progress on this important effort.”

“Once again, GAO has shown the federal program integrity efforts in our nation’s largest health care programs are inadequate, leaving Medicare and Medicaid subject to waste and fraud,” said Sen. Tom Coburn. “To protect taxpayer dollars and patients depending on these programs, the Centers for Medicare and Medicaid Services needs to implement the common-sense steps GAO identified in its report.”

“GAO’s work once again highlights how ineffective the federal government is at addressing waste, fraud and abuse in our healthcare programs,” said Sen. Scott Brown.  “GAO’s report confirms the findings from our June hearing that CMS’ Medicaid efforts have been largely ineffective.  The report also shows how the implementation of a few simple fraud prevention steps could stop more than a 100 million dollars in improper payments from being made.  Taxpayers and beneficiaries alike would be outraged to know that their hard earned money continues to be squandered. We need to be better stewards of their money. “