Physician Practice

OIG management and performance challenges focus on Medicaid and Medicare fraud, meaningful use and EHR security

Physician Practice Insider, December 1, 2015

The Office of the Inspector General (OIG) released its top management and performance challenges for HHS from FY 2015. This annual summary, 2015 Top Management and Performance Challenges (TMC), identifies continuing issues for HHS and predicts emerging vulnerabilities the agency will face in the coming year. The report includes OIG’s analysis of each challenge and assesses HHS’ progress.

The FY 2015 report identifies 10 areas in need of attention. They include:

  • Expanding and protecting Medicaid from fraud, waste, and abuse
  • Fraud, waste, and abuse in Medicare Parts A and B
  • Meaningful use and EHR/HIT security
  • Appropriate use of prescription drugs
  • Financial and administrative management
  • Safety of food, drugs, and medical devices


Medicaid and CHIP enrollment increased by 13.6 million people since ACA took effect in October 2013, according to a report released by CMS in August 2015. Updating eligibility systems and applicable Federal Medical Assistance Percentage (FMAP) will be essential to effective management of the program, the TMC says. Payments made for services performed for ineligible individuals accounted for the majority of Medicaid’s 6.7% improper payment rate. Although the Public Assistance Reporting Information System (PARIS) Medicaid Interstate Match program was created to identify beneficiaries who are simultaneously enrolled in several state’s Medicaid programs, OIG notes that “state participation in the match is limited and its effectiveness in reducing improper payments is inconsistent.”

The report also identifies provider and beneficiary fraud as a major issue for Medicaid. Inconsistent data reporting by states hampers CMS’ ability to detect fraud, waste, and abuse in the program, according to OIG. Other Medicaid management issues include the creation of a functional national Medicaid provider database, misalignment of costs and payments at state operated facilities resulting in increased federal costs, and quality of care for Medicaid beneficiaries—particularly children.

OIG reports that CMS is taking steps to improve data and technology capabilities and verifying state-submitted provider termination data. CMS is also working with states to reduce federal cost inflation and provide stronger guidelines for providing care prescribing drugs to beneficiaries.
Fraud, waste, and abuse in Medicare is a “multidimensional problem” that cost roughly $750 billion in 2009, according to OIG.

OIG acknowledges that the recent transition to ICD-10 may lead to an increase in improper billing in the short term. The report also takes CMS to task for its backlog of RAC appeals. OIG cites inconsistent decisions by administrative law judges and qualified independent contractors, and CMS’ lack of participation in the process, as major hurdles.

Meaningful use and privacy and security risks represent significant challenges for CMS. Although OIG praises CMS’ progress on cybersecurity and the development of an interoperable national health IT infrastructure, more work needs to be done to improve security while facilitating the flow of information and EHR adoption. However, OIG recommends that CMS determine whether EHRs and health IT have achieved the goals of lower costs and improved healthcare. CMS “should continue to consider feedback from stakeholders. Additional guidance and technical assistance should be issued to address adoption, meaningful use, interoperability barriers, and program integrity safeguards.”

OIG cautions that health IT efforts must be guided by privacy and security and should create a system that reduces fraud.

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