EDITOR’S NOTE: This is the second of two articles on this subject appearing in the July 12, 2012 edition of RACMonitorEnews. See Janis Oppelt’s article, “ Congress Directs GAO to Study CMS’s Processes for Multiple Medicare Audits.”

A bipartisan group of senators and representatives who serve as members of the committees of jurisdiction over Medicare in Congress recently convened to develop a request letter to the GAO Comptroller, Gene Dodaro.

Members of the Senate Committee on Finance, the House of Representatives Committee on Ways and Means,  and the House Energy and Commerce Committee were the main contributors. Senators Orrin Hatch (R-Utah), Max Baucus (D-Montana), Tom Coburn (R-Oklahoma) and eight other Congressmen asked the GAO to conduct a study investigating the “coordination of the various audits that are being conducted in the Medicare program.” 

The legislators illustrated their awareness of the several different contractors, citing MACs, RACs, ZPICs, PSCs and CERTs, and questioned the coordination of the programs and the burdens they place on providers. Seeming to empathize with providers from the tone of the letter, the authors indicated they are unsure whether there is one cohesive strategic plan and a set of standards governing all of these individual contractor programs and organizations.

The group mainly wants to ensure the effectiveness and efficiency of these programs, and thus posed a set of four specific questions for the GAO to answer:

  1. What process does CMS use to determine whether contractors’ audit criteria and methodologies are valid, clear and consistent?
  2. How does CMS coordinate among these contractors to ensure that their interactions with providers are not duplicative?
  3. What are the reasons for requesting that similar information be submitted to multiple contractors, and is CMS taking steps to limit duplicative audits?
  4. Does CMS have a strategic plan to coordinate and oversee all of its audit activities, and if so, how is that plan being implemented and overseen?

What Should Be Expected?

The GAO will collaborate with the Medicare Payment Advisory Commission (MedPAC) and its new members to address these questions and develop a report for Congress, yet with several healthcare matters being investigated simultaneously, it is best to assume that this issue may be pushed off until after the Sept. 6-7 MedPAC meeting. For those unfamiliar, MedPAC is an independent Congressional agency that advises Congress on issues affecting Medicare – particularly payments to payers and providers – and analyzes both access to, and quality of, care. Although I personally reached out to staff at all three Congressional committees involved and asked the GAO for a relevant timeline for this investigation, it seems like it is yet to even have crossed peoples’ desks, so much remains unknown.

From the tone, it seems as though lawmakers finally are expressing concerns about the various audit processes and contractors with which providers must deal. They are also finally asking the question that the American Hospital Association (AHA), physicians and administrators have been asking for the past several years: is there really no more efficient and condensed way to ensure proper payments?

Although each contractor has a very specific task, nearly everyone involved in payment compliance has experienced duplicate audits across multiple contractors. We all are aware of white papers, goals and statements of work that exist for each program, but not one overarching set of goals governing all of these programs. This investigation hopefully will help create one unifying strategy, aligning these five different contractors toward a common goal. Revisiting program initiatives might help develop a standardized audit and appeals process and promote coordination to identify synergies among contractors in order to minimize duplication and increase efficiency.

Through a prepayment review demonstration project, we recently began to see a glimmer of hope that CMS would act like other payers and review claims on the front end. However, that initiative does not seem to have the nascent telltale signs of success. Despite originally being scheduled to begin in January 2012, the program was pushed back to “on or after June 2012”and still is yet to begin.

With this new letter and possible pressure from Congress, the project may be nudged along in hopes of establishing more efficient methods of payment review and audit.

After inspecting 2012 Q1 RACTrac data, we saw that nearly 75 percent of RA appeals were overturned in favor of hospitals and that two-thirds of reviewed records did not contain improper payments. From that data alone, we can’t rationalize RACs as an efficiently operating program. As providers begin to appeal more often than just one-third of the time, RA bottom lines in collections will plateau and begin to decline. If a properly conducted survey is performed, the GAO certainly will recognize the inefficiencies within the programs, and although it’s still a telescopic view away, the programs very well may begin to merge, shrink and become more efficient (rather than expand to create more confusion and unnecessary burdens on providers). Until then, we’ll continue cautiously as we watch the audit contract conglomerates grow like monopolies.

About the Author

Gregory P. Calosso, MHA, is a senior consultant for PACE Healthcare Consulting. Greg joined PACE in 2011 after receiving his Masters degree in health administration from the Sloan Program in Health Administration at Cornell University. His past experiences include working in hospital planning and business development, organizational leadership consulting, and clinical research. He holds an undergraduate degree from Cornell University’s Division of Nutritional Sciences.

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Congressional Committees Say Report Due Next Summer

By Chuck Buck

After Gregory Calosso contacted the House Ways and Means Committee and Senate Finance Committee and heard that they knew little to nothing about the letter to the Government Accountability Office (GAO), committee members told him that they didn’t think there would be a timeline for such a project to take place.

Later, on July 6, 2012, Calosso received a phone call from staff of both committees. After having spoken directly to the congressmen themselves, they updated him with more accurate information. Both committees told Calosso that they hope and expect the GAO will conduct its investigation by going through past records of duplicate audits and denials as well as formulating a strategy for changing the current denials and audit processes over the next year. 

Staff members also told Calosso that they expect a conclusion to the study by about next July or August. Subsequently, they anticipate the GAO will work closely with MedPAC to develop a report which will most likely be discussed during a late summer or early fall MedPAC meeting in 2013. Ideally, they told Calosso, Congress would like to take some form of action to help change policies in these processes, if they see it as necessary, by the end of the 2013 calendar year.


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