Tuesday, February 4, 2014

CMS Must Improve MAC Error Rate Reduction Plans

Dianne De La Mare

The US Department of Health and Human Services, Office of Inspector General (OIG), recently released a report, Medicare Claims Administration Contractors’ Error Rate Reduction Plans, which indicates that too many Medicare providers are receiving improper payments, and the Centers for Medicare & Medicaid Services (CMS) must do a better job overseeing its contractors’ error rate reduction plans. The CMS Comprehensive Error Rate Testing (CERT) program estimates the number of improper Medicare payments made by Medicare Administrative Contractors (MACs) each year.

Based on that information from CERTs, MACs improperly paid an estimated $29.6 billion during the FY 2012 reporting period-- resulting in an 8.5 percent error rate. To reduce the error rate, CMS requires MACs to submit error rate reduction plans. In these plans, MACs must describe the corrective actions that they will take to lower the rates. This OIG report found that although most error rate reduction plans included the required elements; CMS’ oversight of error rate reduction plans is limited. CMS staff reviewing the plans could not always determine if the plans addressed the most recent CERT results. Further, CMS approved sampled plans without recommending different or additional corrective actions. OIG recommends and CMS concurs that it should: a) review its process for overseeing MAC error rate reduction; 2) Ensure that MACs submit clear plans for reducing their error rates; 3) Provide additional guidance for contractors and CMS staff who review plans; and 4) Provide error rate reduction incentives that are aligned with the contracts’ error rates and performance periods. To obtain a copy of the complete report go to the HHS website.

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