However, our ongoing review of the quality of CMS’ communications with physicians participating in the Medicare program shows that the information given to providers is often incomplete, confusing, out of date, or even incorrect. For example, it calls on CMS to centrally coordinate the educational activities provided through Medicare contractors, to appoint a Medicare Provider Ombudsman, and to offer technical assistance to small providers through a demonstration program. This type of contract reimburses contractors for necessary and proper costs of carrying out Medicare activities, but does not specifically provide for contractor profit or other incentives. Several key provisions of MRCRA would address these elements of contracting reform. MRCRA would establish a full and open procurement process that would provide CMS with express authority to contract with any qualified entity for claims administration, including entities that are not health insurers. MRCRA would also encourage CMS to use incentive payments to encourage quality service and efficiency. Concluding Observations

The scope and complexity of the Medicare program make complete, accurate, and timely communication of program information necessary to help providers comply with Medicare requirements and appropriately bill for their services.
Why GAO Did This Study

Complete, accurate, and timely communication of program information is necessary to help Medicare providers comply with program requirements and appropriately bill for their services. Information provided to physicians about billing and payment policies is often incomplete, confusing, out of date, or even incorrect.

What GAO Found

GAO found that the rules governing Centers for Medicare and Medicaid Services (CMS) contracts with its claims processors lack incentives for efficient operations. Medicare contractors are chosen without full and open competition from among health insurance companies, rather from a broad universe of potential qualified entities, and CMS almost always uses cost-only contracts, which pay contractors for costs incurred but generally do not offer any type of performance incentives. To improve Medicare contractors' provider communications, CMS must develop a more centralized and coordinated approach consistent with the provisions of the Medicare Regulatory and Contracting Reform Act (MRCRA) of 2001. MRCRA would require that CMS (1) centrally coordinate contractors' provider education activities, (2) establish communications performance standards, (3) appoint a Medicare Provider Ombudsman, and (4) create a demonstration program to offer technical assistance to small providers. MRCRA would also broaden CMS authority so that various types of contractors would be able to compete for claims administration contracts and their payment would reflect the quality of the services they provide.