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GAO report: Medicare ineffective at combating fraud

Healthcare Auditing Weekly, December 26, 2007

The Government Accountability Office (GAO) found that Medicare made nearly $90 million in potentially questionable payments to contractors, according to a GAO audit report.

Congress appropriated $1 billion for start-up administrative costs to implement the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). The GAO audit revealed CMS had spent more than 90% of that money by the end of December 2006. The GAO audit review extended beyond contract amounts paid with MMA funds.

CMS paid slightly more than $735 million to contractors that provided marketing assistance and oversight of the 1-800-Medicare help line, as well as technical support.

However, the audit revealed that approximately $90 million of those payments may have been improper because they covered:

• Costs that did not meet contract terms
• Costs without adequate support for the auditor to determine whether they were allowable
• Potential waste caused by risks in CMS's contracting practices

The audit also found CMS did not allocate sufficient staff or resources to oversee contractors and contracts.

The GAO made nine recommendations to improve internal controls and accountability in the contracting process.

Click here to read the GAO's report.

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