Increase in Fraud and Abuse Debt Is the Primary Reason for Reported Growth in CMP Debt

The primary reason for the growth of CMS’ CMP receivables was the  expansion of fraud and abuse detection activities from fiscal years 1995  through 1997 that significantly increased fraud and abuse debts in fiscal  year 1997. However, our work identified that year- end CMP receivables balances for fiscal year 1997 through fiscal year  1999, differed by tens of millions of dollars between HHS’ accountability  report and CMS’ audited financial statements. However, incomplete and unreliable CMP information limited  us from determining the overall adequacy of the CMP debt collection  policies and procedures. We found that debt collection policies and procedures were followed for 11  of the 12 selected delinquent debts. We could not determine whether DOJ  followed its debt collection policies and procedures for the remaining  selected debt because DOJ was unable to locate supporting  documentation. As discussed in this report, as of September 30, 2000, the CMP receivables  balance in the general ledger and the detailed subsidiary systems differed  by a net of about $22 million. Background

		• As of September 30, 2000, the Department of Health and Human

Services (HHS) reported that CMS’ CMP receivables totaled about $260 million. The Civil Division uses the Debt Collection System. CMP Receivables Have Similar Financial Accountability and Reporting Issues as Non-CMP Receivables

		• Our analysis of CMS’ CMP receivables data revealed similar financial

accountability and reporting issues as those identified for non-CMP receivables by CMS’ external financial statement auditors. 2.
Why GAO Did This Study

This report focuses on the debt collection processes and procedures used by the Department of Health and Human Services' (HHS) Centers for Medicare and Medicaid Services (CMS).

What GAO Found

The primary reason for the growth of CMS' civil monetary penalties (CMP) receivables was the expansion of fraud and abuse detection activities from fiscal year 1995 through fiscal year 1997 that significantly increased reported fraud and abuse debts in fiscal year 1997. GAO's analysis of CMS' CMP receivable data revealed similar financial accountability and reporting issues as those identified for non-CMP receivables by CMS' external financial statement auditors. GAO identified (1) unreconciled differences of tens of millions of dollars in the CMP receivables balances reported by HHS and CMS for fiscal years 1997 through 1999 and (2) an unreconciled net difference of about $22 million between the CMP receivables balance in CMS' general ledger and the detailed subsidiary systems as of September 30, 2000. The data reliability issue prevented GAO from determining the overall adequacy of the CMP debt collection policies and procedures. However, GAO's limited tests showed that debt collection policies and procedures were followed for 11 of the 12 selected delinquent debts. GAO could not determine whether debt collection policies and procedures were followed for the 12th selected debt because supporting documentation was unavailable.