A new report critical of accounting practices at the Centers for Medicare and Medicaid Services has barely drawn a yawn from healthcare provider associations, frequently some of the CMS' biggest critics.
Maybe that's because the Dec. 31 report issued by the General Accounting Office lambastes the CMS for not collecting or even accurately accounting for tens of millions of dollars in fines and fraud settlements with healthcare providers.
Richard Coorsh, a spokesman for the Federation of American Health Systems, declined to comment on the report. American Medical Association spokesman Robert Mills said no one was available to comment. And Richard Wade, senior vice president of communications at the American Hospital Association, said the GAO report is not an issue for his members.
"The GAO report points to the need for tighter cooperation between the CMS, the Justice Department and HHS' inspector general in the aftermath of these settlement cases," Wade said. "Anything that promotes that effort is in everyone's best interest."
The report indicates that although the federal government is assessing record amounts in penalties against healthcare providers, unknown millions of those dollars aren't being collected.
Not only has the CMS failed to collect tens of millions of dollars in penalties, but it is also unprepared to deal with the growing volume of fines and penalties from healthcare fraud settlements, the GAO said in the 73-page report. Among the shortcomings the GAO cited were the CMS' lack of written policies for reconciling receivables, its failure to record payments in a general ledger and a failure to allow for uncollectible obligations.
HHS' inspector general's office reported its staff recorded 417 civil actions, 2,354 sanctions and investigative receivables of $1.5 billion in its semiannual report for the fiscal year ended Sept. 30, 2001.
Medicare's receivables from penalties and settlements have mushroomed since 1997, after the expansion of federal agencies' authority to investigate and prosecute fraudulent activity. About $255 million of the $260 million in outstanding penalties held by the CMS as of Sept. 30, 2000, was attributable to fraud and abuse debts; nearly $172 million of that had been outstanding since fiscal 1997, the GAO said.
The outstanding receivables include all uncollected debts of at least $2 million that were delinquent for 60 days or more from penalties dating from fiscal 1997 through fiscal 2000.
It's not clear how much of the debt was uncollected, should have been written off as uncollectible or had been collected by another federal agency but remained outstanding in the CMS' books. Indeed, GAO investigators complained they were unable to fully assess the adequacy of the CMS' procedures for penalties because the agency didn't provide complete information.
One problem with tracking outstanding penalties is that the CMS' regional offices collect debts from nursing homes, while HHS' inspector general's office or the U.S. Justice Department collect other penalties. In its defense, the CMS said the inspector general's office and the Justice Department, which account for 99% of its receivables, do not routinely provide the CMS with updates on collections.
"Therefore, it will be difficult for the CMS to fully resolve problems discussed in your report," CMS Deputy Administrator Ruben King-Shaw Jr. said in a letter to the GAO.
Saying the agency has made considerable progress in improving internal financial controls, King-Shaw conceded: "We still have some financial management issues that hinder our ability to report accurate financial information."
In general, King-Shaw agreed with the GAO's recommendations, including establishing a better method for determining uncollectibles, reconciling the reporting of the agencies involved and requiring regional offices to record nursing home debts when they are imposed, instead of when they are collected, as is the current practice.