TRENDS SHOW CMS CONTRACTORS HIRED TO DETECT AND STOP FRAUD IDENTIFIED LESS THAN 1 PERCENT OF FRAUD AND RECOVERED LESS THAN 10 PERCENT OF OVERPAYMENTS

WASHINGTON, JUNE 8, 2012 --  “Since 1999, the Centers for Medicare and Medicaid Services (CMS) has hired contractors to provide ‘benefits integrity’ for the Medicare and Medicaid programs,” said Rep. Cliff Stearns (R-FL), Chairman of the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations.  “Looking at data since 2007 on the effectiveness of these contractors, we have learned that benefit integrity contractors identify less than 1 percent of the estimated fraud out there, recover only 10% of the improper payments they identify, and rarely employ their authority to suspend payments to suspected fraudsters.”

During the hearing, Stearns noted that the data provide by CMS to the Committee were incorrect.  Mr. Ted Doolittle, Deputy Director, Center for Program Integrity at CMS, could not answer when the correct data would be provided.  Stearns then asked Doolittle, “Yes or no, since 2007 has the total number of investigations initiated, have they steadily declined?”  Doolittle answered, “I wouldn’t say that they have steadily declined, I think it’s been up and down.”  Stearns responded, “Our figures showed they declined.”  It is clear that CMS is unable to even understand the scope of fraud or the effectiveness of its contractors in detecting and preventing it.

Robert A. Vito, Regional Inspector General for Evaluation and Inspections, Office of Inspector General, U.S. Department of Health and Human Services, also testified on the inadequacies of these contractors and of CMS.  Vito stated, “Medicare benefit integrity contractors are required to help prevent fraud, waste, and abuse by identifying systemic vulnerabilities in the Medicare program. However, OIG (Office of Inspector General) has found that some contractors are not reporting any program vulnerabilities to CMS.”  He further testified, “Our early review of fraud units found that more than one-third of them had not identified any program vulnerabilities. In 2009, almost half of the benefit integrity contractors reviewed did not report any program vulnerabilities to CMS.”

Stearns concluded, “This complacency at CMS in demanding accountability from its contractors and its inability to understand or address the scope of waste, fraud, and abuse must end now!”