The CMS should evaluate the work of their Medicare administrative contractors to increase efficiency and improve quality, the GAO says in a new report.
The agency has 16 Medicare administrative contractors that review claims submitted by providers and suppliers.
In fiscal 2013, these contractors processed almost 1.2 billion fee-for-service Medicare Part A and Part B claims, which totaled more than $363.3 billion in payments for Medicare services. The CMS paid approximately $1.3 billion to the MACs for these services that year.
The federal agency found that the CMS has accumulated a considerable amount of data on MACs over the years, but hasn't done any sort of evaluation to see whether other contracting approaches could be done to improve their efficiency and effectiveness.
“Without using the wealth of data it has collected since the implementation of contracting reform to analyze other available contracting approaches, CMS may be missing opportunities to increase MACs' efficiency and effectiveness,” the report says.
Some alternative contracting approaches the CMS could consider include using award terms to incentivize MACs' performance by automatically extending their contracts as long as they met pre-established performance requirements. Or alternatively, they could implement negative performance incentives like deducting from a contractor's base fees if it failed to meet certain performance thresholds, or reducing the length of the contract if the MAC failed to meet established performance thresholds.
In a formal response, HHS did not back any specific contracting suggestions by the GAO, but did commit to performing an analysis to determine if further refining the MAC contracting process would be beneficial.