GAO Issues Report on CMS Oversight of Medicare Contractor’s Education to Providers.

Date posted: June 2, 2017

The Government Accountability Office (GAO) recently released a report reviewing the Centers for Medicare and Medicaid Services’ (CMS) oversight of Medicare Administrative Contractors’ (MACs) education to providers regarding correct billing procedures.  The GAO found CMS’ oversight of the MACs provider education programs to be inadequate.  CMS relies upon contracts with MACs to process and pay Medicare claims.  MACs also conduct prepayment and postpayment claim reviews.  MACs’ provider education programs aim to reduce the rate of improper payments by giving providers information to understand the coverage and payment rules and bill correctly.  MACs are compensated for their provider outreach and education.  Carrying out this responsibility averages two to three percent of their total annual costs under their Medicare contracts.  Despite the training, in 2016 there were $41.1 billion in provider payments that were made in error.  The payments were made for incorrect amounts and for improperly documented claims.  In total, these erroneous payments accounted for 11 percent of the payments made to all health care providers.  Medicare fee-for service accounted for roughly two-thirds of all improper payments.

MACs’ educational responsibilities include conducting “probe and educate” reviews.  For these reviews, MACs analyze a sample of claims in order to identify and correct billing issues through provider education.  Probe and educate reviews aim to reduce improper billing in targeted areas.  MACs are required to report their provider education department efforts monthly to permit CMS oversight.  The GAO report reviewed MACs’ provider education department efforts to (a) help reduce improper billing; (b) determine the extent to which CMS oversees these efforts; and (c) determine the extent to which CMS measured the effectiveness of the MAC probe and educate reviews in reducing improper billing.

The GAO reported the following findings:

  • CMS lacked information from the MACs to provide proper oversight of MACs’ provider education;
  • CMS has little assurance that referral providers were being educated on reducing improper billing in DME and home health services;
  • CMS is failing to determine the effectiveness of the probe and educate reviews;
  • CMS has insufficient information to determine if probe and education reviews help to reduce improper billing;
  • MACs are not required to provide specifics on their provider education department efforts;
  • Short-stay hospital and home health claims have been the focus of the MACs’ probe and educate reviews—this is a CMS strategy to help providers improve billing in areas vulnerable to improper billing;
  • The percentage of erroneous claims remained high throughout the three rounds of the review process, despite the offer of education after each round; and
  • Without performance metrics, CMS is unable to determine if future probe and educate reviews would be effective in reducing improper billing.

The GAO Recommended that CMS:

  • Improve the effectiveness and its oversight of MAC education;
  • Establish performance metrics to determine if the probe and educate reviews are effective;
  • Mandate MACs to provide sufficient detail to determine the extent of provider education focus on areas identified as vulnerable to improper billing;
  • Require A/B, DME, and HH+H MACs to work together to educate referring providers on documentation requirements for DME and home health services; and
  • Establish performance metrics to determine the reviews’ effectiveness in reducing improper billing.

The GAO Report can be found at:

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