Completing a fraud weakness trifecta in recent weeks, health plans were hauled on the carpet by a government watchdog agency for failing to adequately fight Medicare fraud.
The latest report from the Government Accountability Office was released Monday, but was dated July 21. It said a sampling of five national Medicare Part D drug-plan sponsors found that only two of the sponsors had fully implemented all seven required anti-fraud measures. The 24 million member Part D program had expenditures of $39 billion in 2007, according to the GAO. The GAO conducted its review of the drug plans between October 2006 and June 2008.
It followed a GAO report issued earlier this month in which the GAO covertly set up two phony durable medical-equipment suppliers and were able get approval for Medicare billing privileges despite having no clients or inventory.
And, according to the New York Times and the Miami Herald, citing a draft report from the HHS' inspector general's office, the results of CMS efforts to reduce Medicare durable medical-equipment fraud were overstated because of improper auditing.
Monday, the GAO castigated both the Part D program sponsors and the government in its 43-page report, Some Plan Sponsors Have Not Completely Implemented Fraud and Abuse Programs, and CMS Oversight Has Been Limited. Compliance plans are supposed to have "written policies, procedures and standards of conduct effective lines of communication that should include a confidential or anonymous mechanism, such as a hot line, to receive compliance questions and reports of fraud, waste or abuse (and) well-publicized disciplinary guidelines through which sponsors must enforce standards." According to the GAO, all five plans surveyed had both required and recommended elements for these three criteria.
Variability came into play with all five plans not entirely meeting the remaining four required and recommended criteria, that a compliance plan must "designate a compliance officer and a compliance committee that are accountable to senior management include effective training and education pertaining to fraud, waste and abuse for the organization's employees and contractors (and) include effective internal monitoring and auditing procedures which should include the development and implementation of procedures that are intended to protect Part D from fraud, waste and abuse, including monitoring and auditing of contractors (and) include procedures for ensuring prompt responses to detected offenses and development of corrective action initiatives, including responses to potential offenses."
Lack of adequate training was the most common deficiency (four of the five plans were either in partial noncompliance or were entirely in noncompliance with training requirements and recommendations). Internal monitoring and auditing followed with two plans either in partial noncompliance or total noncompliance. At least one plan was in partial noncompliance for each of the other two criteria.
The internal monitoring criteria had an auditing requirement stating that the plans must have procedures in place for both effective internal monitoring and auditing as well as procedures to monitor and audit contractors and "related entities with respect to the drug benefit." A recommended measure calls for the plans to "conduct data analysis to detect fraud, waste and abuse at the sponsor or contractor levels."
In addition to the Medicare Part D plan sponsors, the GAO also criticized the CMS for laxity in its oversight role.
The GAO reported that the CMS had limited its reviews of compliance plans of Part D programs to an examination of the plans at the time of the sponsor's initial Part D applications, but had conducted little in the way of follow up. The GAO said "neither of the two offices within the CMS with responsibility for overseeing sponsors' implementation of these programs has conducted an audit of sponsors' compliance with fraud, waste and abuse program requirements."
According to the GAO, the Center for Beneficiary Choices at the CMS, is "the lead office for operational oversight," including audits regarding "Part D sponsors' implementation of their compliance plans." But it conducted no audits of sponsors' fraud and abuse programs in 2007 and had no plans to do the audits in 2008, the GAO said. In addition, the CMS' financial management office"the lead office for program and fiscal integrity"had contracted with the Medicare Drug Integrity Contractors" to support its audit, oversight and anti-fraud and abuse work, but as of April 2008, those audits had not been conducted either.
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