OIG weighs in on CMS oversight of bid program

WASHINGTON - As part of the Round 1 of competitive bidding, CMS generally selected DMEPOS suppliers and correctly computed the sampled single payment amounts in accordance with its established procedures and applicable federal requirements, according to a report published today by the Office of Inspector General (OIG).

Specifically, the OIG determined that for 255 of the 266 contract suppliers associated with the sampled single payment amounts reviewed, CMS consistently followed its procedures and applicable federal requirements.

To conduct its investigation, the OIG randomly sampled 100 of the 3,011 established single payment amounts in the Round 1 re-bid program and examined the selection process for the 266 contract suppliers in the sample. It reviewed 63,906 lines of service related to the sample, totaling about $5.1 million paid during the first six months of 2011.

While the overall effect was immaterial, the OIG determined that for 11 of the 266 contract suppliers, CMS did not consistently follow its established procedures and applicable federal requirements, affecting 19 of the 100 sampled single payment amounts. Specifically, CMS awarded contracts to nine suppliers that did not meet financial documentation requirements, and it incorrectly used two suppliers in one single payment computation.

On the basis of its sample, the OIG estimates that CMS paid suppliers $33,704 less than they would have received without any errors, or less than 0.1% of the $113 million paid under the program in the first six months of 2011.

The OIG recommends that CMS follow its established program procedures and applicable federal requirements consistently in evaluating the financial documents of all suppliers; and ensure that all bids are included in the calculation of single payment amounts before offering contracts.

CMS concurred with the OIG's recommendations.