Grassley sees potential for conflicts in contractor programs

Senate Finance Committee ranking member Chuck Grassley (R-Iowa) has asked the CMS to list any identified conflicts of interest among the agency's contractors and highlight any steps that CMS has taken to prevent those conflicts.

In an Oct. 29 letter, Grassley said he is concerned that the financial relationships between certain contractors may create conflicting roles that would hinder a contractor's objectivity when monitoring and reviewing another contractor's work. As Grassley explained in his correspondence to CMS Administrator Donald Berwick, the Health Insurance Portability and Accountability Act of 1996 authorized the CMS to contract with private organizations to conduct program integrity activities.

“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.

Grassley then cited a decision by the Government Accountability Office earlier this year in which the GAO upheld a protest by company C2Solutions to a CMS decision to give the company AdvanceMed a contract to detect and investigate potential fraud because of its conflict of interest. In that instance, the contract would have positioned AdvanceMed to evaluate the work of its own parent company, Computer Sciences Corp.

“I am concerned that there are other similar cases at CMS involving potential contractor conflicts of interest,” wrote Grassley, who then listed some other companies that are also subsidiaries of parent companies that have contracts with the CMS.

Grassley asked for a response to his letter by no later than Nov. 19.