OIG: CMS takes too long to identify problems

WASHINGTON - CMS revoked the billing privileges of 21% of high- and medium-risk newly enrolled HME providers, but not before the agency reimbursed them $2.8 million and $70,582, respectively, according to a new report from the Office of Inspector General (OIG).

"Some suppliers in our sample received significant Medicare reimbursement before CMS's contractor conducted its first post-enrollment site visits to the suppliers' business locations and CMS took enforcement action," the report states.

The report was based on a nationally representative sample of 229 providers enrolled for their first year in Medicare during October-December 2008.

The OIG found that 26% of high- and medium-risk HME providers and 2% of low-risk providers required enforcement actions like CMS revoking their billing privileges or putting them under prepayment review.

It also found that 13% of high- and medium-risk providers and 4% of low-risk providers omitted ownership or management information from their applications. This information included owners or managers with prior convictions for serious crimes or those subjected to adverse legal actions.

"Many suppliers in our sample that omitted this information remained in Medicare through December 2010, suggesting that information omitted from applications can remain undetected for more than a year despite NSC oversight," the report states.

Additionally, the OIG found that 4% of high- and medium-risk providers omitted information regarding owner or manager criminal histories or adverse legal actions taken against these individuals. This information included insurance fraud, theft by deception, felony drug possession and felony aggravated battery.

The OIG concluded that, although the Affordable Care Act (ACA) strengthens enrollment screening, further scrutiny of the riskiest applicants is needed to prevent dishonest individuals from receiving Medicare payment. It recommends that CMS:

* conduct post enrollment site visits earlier for new providers that receive the most money from Medicare;

* apply investigative techniques and tools to identify any owners or managers of providers who are not reported on applications as required; and

* take appropriate action regarding providers that omit information from applications.

CMS agreed with the OIG, stating that it's using the authorities granted under the ACA to address potential vulnerabilities.