In a separate letter to CMS Administrator Donald Berwick, M.D. also dated Oct. 29  (, Grassley questioned whether financial relationships between certain contractors may constitute conflicting roles that could hamper their objectivity when monitoring and reviewing another contractor’s work, which he said also may interfere with their aggressive pursuit of fraud, waste and abuse.  “Financial relationships can make contractors less aggressive in overseeing each other than they might be without those relationships,” Grassley explained. “Transparency and prevention of conflicts of interest could strengthen the detection of fraud, waste and abuse in government health programs and benefit taxpayers.”


Program Safeguard Administrators


Grassley’s letter specifically addressed concerns regarding contractors in the Program Safeguard Contractor (PSC) and Zone Program Integrity Contractor (ZPIC) programs, listing AdvanceMed Corporation, Cahaba Safeguard Administrators LLC, TrustSolutions LLC and United Government Services LLC. The letter scrutinizes  the potential financial conflicts of interest connected to the organizational relationships between these CMS contractors and raises questions about whether or not some ZPICs and PSCs can carry out their contractual responsibilities effectively, especially with respect to their parent companies or affiliates.


“These Zone Program Integrity Contractors (ZPICs) and Program Safeguard Contractors (PSCs) are tasked with providing Medicare benefit integrity functions for CMS, such as conducting fraud investigations, referring suspected fraud to law enforcement, and performing data analysis to identify trends and billing patterns that indicate fraudulent billing,” Grassley wrote.


What’s Being Done to Avoid Potential Conflicts


The letter to Berwick asked that CMS identify any and all steps it has taken to ensure that all potential financial conflicts between the PSCs/ZPICS and other companies doing business with CMS have been or can be identified, both in CMS’s pre-award administrative processes and post-award contract administration for situations in which one CMS contractor is acquired by another during the pendency of their performance period. The letter also asks CMS to provide copies of any and all written policies pertaining to how it identifies, monitors and manages potential conflicts of interest between contractors, plus copies of any pre- or post-award waivers or other documentation generated by identifying these conflicts, listing all companies involved. The letter also requests an outline of CMS’s determination for allowing the PSC/ZPIC contract awards.


Looking for Greater Transparency


Earlier in the month, Grassley had raised similar concerns about program safety contractors failing to open new cases or refer investigations to law enforcement when warranted. Grassley also wrote to CMS recently to seek greater transparency from program officials regarding contractor accountability and how much contractors are being paid to perform their work. In an Oct. 15 letter to Berwick (, Grassley asked CMS to provide answers to some 2009 inquiries that the senator had requested, including information about the awards to each of the ZPICs, citing criticism of the Returns on Investment (ROI) the PSCs/ZPICs bring to the Medicare/Medicaid program detailed in two recently published U.S. Department of Health and Human Services Office of Inspector General (OIG) reports. “The Centers for Medicare and Medicaid Services is not holding contractors accountable when those contractors fail to carry out their responsibilities or fulfill contract terms,” Grassley said. “The Centers for Medicare and Medicaid Services needs to do what it takes to make sure these contractors don’t waste taxpayer dollars.”


An Oct. 6letter to HHS and CMS ( cites similar concerns about the performance of Palmetto GBA’s performance as a MAC and the performance of QIOs, calling into question CMS’s oversight of both programs.



About the Author


Carla’s background includes over twenty years in hospital and physician practice operations, particularly in reimbursement and billing functions.  In the last 2-1/2 years, Carla has been in sales and operations for a compliance software compliance company. Prior to that, she was the Vice President of Compliance for a national revenue cycle solutions company and was in the Reimbursement Training Department with HCA. For several years she headed up the Part A Fraud Investigation Unit for a CMS Program Safeguard Contractor (PSC) where she was successful in the prosecution of several national cases. She has worked with a number of clients in California and Florida with Recovery Audit Contractors (RACs) in setting up processes and appeals during the demonstration project and has worked with clients now for their preparation for the RACpermanent project as well as MIC, ZPIC, and other governmental audits.  Carla is actively involved in professional associations such as the Health Care Compliance Association (HCCA) and the Healthcare Financial Management Association (HFMA).  She received her MBA in Health Care Management from the University of Phoenix in 2005 and now teaches several healthcare-related courses as an adjunct faculty member.


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