The CERT contractor conducts postpayment claims reviews on a  nationwide random sample of claims, which are used to annually estimate  the national Medicare FFS improper payment rate. CMS Lacks Reliable Data to Estimate the Number of Duplicative Claims Reviews and Has Not Taken Sufficient Steps to Prevent Inappropriate Duplication

CMS lacks reliable data to estimate the number of duplicative claims  reviews that are conducted. CMS also has not issued complete  guidance for MACs and ZPICs on whether it is appropriate for them to  conduct duplicative reviews. The RAs performed  more than 80 percent of the claims reviews in 2012 and the Recovery  Audit Data Warehouse was designed to track RA claims review activities  and to prevent RAs from duplicating other contractors’ claims reviews; it  was not designed to track and prevent duplicate claims reviews by the  other three contractor types. Efficiency and Effectiveness of Communications to Providers May Be Reduced by Differences and Lack of Clarity in CMS’s Requirements, Contractor Compliance, and Extent of CMS’s Oversight

Several factors may reduce the efficiency and effectiveness of  contractors’ correspondence with providers. CMS’s Requirements for Correspondence Content Vary across Contractor Types and Are Not Always Clear

CMS requires contractors to include certain content in the  correspondence they send to providers, but the requirements sometimes  differ. Contractors Did Not Consistently Comply with Requirements for Correspondence Content

Compliance with CMS requirements was not consistent across contractor  types for the correspondence we reviewed. 1). Our findings that contractors did not comply consistently  with CMS’s requirements for the correspondence we reviewed indicate  that CMS’s monitoring efforts in this area are not adequate to meet  federal internal control standards to monitor contractors’ activities. CMS Has Some External Validation Reviews for Three of Four Contractor Types

CMS has implemented additional quality assurance processes in which  the MACs, ZPICs, and RAs have a sample of their claims reviews  undergo external validation by CMS or an independent contractor, using  clinical staff or coders, to assess the appropriateness of the contractors’  claims review decisions about whether the claim was paid properly  according to Medicare coverage and billing rules. CMS Has Multiple Strategies for Coordinating Postpayment Claims Reviews, but Differences in Requirements and Contractor Coordination Remain That May Hamper Effectiveness and Efficiency of Claims Reviews

CMS has strategies to coordinate internally among relevant CMS offices  in developing the requirements for postpayment claims review  contractors’ activities and has strategies to facilitate coordination among  the contractor types. 3.) However, CMS’s internal coordination strategies have not resolved long- standing differences in requirements across contractor types. It is important that providers understand the postpayment claims review  process, including what documentation they need to send to contractors,  the steps in the review process, and their rights. The comparatively limited amount of required  communication between ZPICs and other contractors addressing  improper payment issues reduces CMS’s assurance that the four types of  postpayment contractors that we reviewed are coordinating as effectively  as possible to reduce improper payments and fraud. Recommendations for Executive Action

In order to improve the efficiency and effectiveness of Medicare  postpayment claims review efforts and simplify compliance for providers,  we recommend that the Administrator of CMS take the following four  actions: monitor the Recovery Audit Data Warehouse to ensure that all  postpayment review contractors are submitting required data and that  the data the database contains are accurate and complete; develop complete guidance to define contractors’ responsibilities  regarding duplicative claims reviews, including specifying whether and  when MACs and ZPICs can duplicate other contractors’ reviews;  clarify the current requirements for the content of contractors’ ADRs  and results letters and standardize the requirements and contents as  much as possible to ensure greater consistency among postpayment  claims review contractors’ correspondence; and assess regularly whether contractors are complying with CMS  requirements for the content of correspondence sent to providers  regarding claims reviews. In its comments, HHS agreed with our  findings and concurred with all four recommendations. We selected all four Recovery Auditors (RA) because they  conduct substantially more postpayment claims reviews than all the other  contractors combined, and the Comprehensive Error Rate Testing  (CERT) contractor, which reviews a nationwide random sample of claims. To assess the extent to which CMS requirements for the content of  contractors’ correspondence with providers help ensure effective  communication, we focused our review on ADRs and results letters. Appendix II: Comments from the Department of Health and Human Services

Appendix III: GAO Contacts and Staff Acknowledgments

	GAO Contact

	Staff Acknowledgments

In addition to the contact named above, Sheila. Related GAO Products

Medicare Program Integrity: Contractors Reported Generating Savings,  but CMS Could Improve Its Oversight. GAO’s 2013 High-Risk Update: Medicare and Medicaid.
Why GAO Did This Study

Several types of Medicare contractors conduct postpayment claims reviews to help reduce improper payments. Questions have been raised about their effectiveness and efficiency, and the burden on providers. GAO was asked to assess aspects of the claims review process.
Building on GAO's July 2013 report on postpayment claims review requirements, this report examines, among other things, the extent to which CMS has (1) data to assess whether contractors conduct duplicative postpayment claims reviews, (2) requirements for contractor correspondence with providers to help ensure effective communication, and (3) strategies for coordination of claims review activities. GAO reviewed CMS's requirements for claims reviews; interviewed CMS officials, selected contractors, and provider associations; analyzed CMS data; assessed a nongeneralizable sample of 114 pieces of contractor correspondence for compliance with requirements; and assessed CMS's requirements and oversight against federal internal control standards and other guidance.

What GAO Found

The Centers for Medicare & Medicaid Services (CMS) within the Department of Health and Human Services (HHS) has taken steps to prevent its contractors from conducting certain duplicative postpayment claims reviews—reviews of the same claims that are not permitted by the agency—but CMS neither has reliable data nor provides sufficient oversight and guidance to measure and fully prevent duplication. The four types of contractors GAO reviewed that examine providers' documentation to determine whether Medicare's payment was proper included
Medicare Administrative Contractors (MAC), which process and pay claims;
Zone Program Integrity Contractors (ZPIC), which investigate potential fraud;
Recovery Auditors (RA), tasked with identifying on a postpayment basis improper payments not previously reviewed by other contractors; and
the Comprehensive Error Rate Testing (CERT) contractor, which reviews claims used to annually estimate Medicare's improper payment rate.
CMS implemented a database to track RA activities, designed in part to prevent RAs, which conducted most of the postpayment reviews, from duplicating other contractors' reviews. However, the database was not designed to provide information on all possible duplication, and its data are not reliable because other postpayment contractors did not consistently enter information about their reviews. CMS has not provided sufficient oversight of these data or issued complete guidance to contractors on avoiding duplicative claims reviews.
CMS requires its contractors to include certain content in postpayment review correspondence with providers, but some requirements vary across contractor types and are not always clear, and contractors vary in their compliance with their requirements. These factors can lead to providers receiving less information about the reviews and thus decrease effective communication with them. In addition, the extent of CMS's oversight of correspondence varies across contractors, which decreases assurance that contractors comply consistently with requirements. In the correspondence reviewed, GAO found high compliance rates for some requirements, such as citing the issues leading to an overpayment, but low compliance rates for requirements about communicating providers' rights, which could affect providers' ability to exercise their rights.
CMS has strategies to coordinate internally among relevant offices regarding requirements for contractors' claims review activities. The agency also has strategies to facilitate coordination among contractors, such as requiring joint operating agreements between contractors operating in the same geographic area. However, these strategies have not led to consistent requirements across contractor types or full coordination between ZPICs and RAs. GAO previously recommended that CMS increase the consistency of its requirements, where appropriate, and the HHS Office of Inspector General has recommended steps to improve coordination between ZPICs and RAs.

What GAO Recommends

GAO recommends that CMS take actions to improve the efficiency and effectiveness of contractors' postpayment review efforts, which include providing additional oversight and guidance regarding data, duplicative reviews, and contractor correspondence. In its comments, the Department of Health and Human Services concurred with the recommendations and noted plans to improve CMS oversight and guidance.