Industry News

GAO Analyzes Inconsistencies of CMS Contractors.

Lisa Shuman | August 2013

The United States Government Accountability Office (GAO) recently released a report that analyzed inconsistencies of the Centers for Medicare & Medicaid Services’ (CMS’) contractors that conduct postpayment reviews on Medicare fee-for-service (FFS) claims.  The four CMS contractors involved in the review include: (1) Medicare Administrative Contractors (MACs) that process and pay claims and decrease payment errors; (2) Zone Program Integrity Contractors (ZPICs) that investigate potential fraud; (3) Recovery Auditors (RA) that identify improper payments through postpayment review; and (4) Comprehensive Error Rate Testing (CERT) contractors that review a sample of claims to establish a national Medicare FFS improper payment rate.  

All four types of contractors conduct complex reviews, but perform different functions, and are managed by different offices within CMS.  RAs are paid on a contingency fee basis, which is dependent on the amount of claims that are found improper and recouped or adjusted.  Conversely, the other contractors are not reimbursed based on the amount of claims reviewed.  Notably, RAs conducted nearly five times as many reviews as the other contractors combined.  The GAO reported that some differences in requirements across CMS contractors may increase administrative burdens and hinder the efficiency and effectiveness of claims reviews.  Such differences include:

  • Oversight of claims selection;
  • Time frames for providers to submit documentation;
  • Communications to providers regarding the reviews;
  • Reviewer staffing; and
  • Processes to ensure the quality of claims reviews.

The GAO recommends that CMS (1) determine which contractor postpayment review requirements can be made more consistent; (2) communicate its findings and time frame for taking action; and (3) decrease inconsistencies without hindering efforts to reduce improper payments.  The Department of Health and Human Services agreed with these recommendations.

 The GAO article on the four CMS contractors is available at:

Government Accountability Office.  “Medicare Program Integrity: Increasing Consistency of Contractor Requirements May Improve Administrative Efficiency.”  GAO-13-522.  22 Aug. 2013.  

About the Author

Ms. Shuman assists health care organizations to develop, implement and evaluate their compliance programs and HIPAA privacy programs. Ms. Shuman specializes in our firm’s HIPAA Privacy services, including leading privacy investigations, breach risk assessments, breach notification letters, breach reporting to the Office for Civil Rights and corrective actions plans. She specializes in serving as Interim Privacy Officer for large health care systems, managed care organizations, comprehensive cancer center and health care business associate.