OIG audit: CMS failed to collect more than $200 million in overpayments
CMS only collected approximately half of the $498 million in Medicare overpayments identified by the Office of Inspector General (OIG) for services between October 1, 2014, and December 31, 2016, according to an audit report published in July. The audit was conducted to determine the extent to which CMS recovered these funds and took corrective action. Of the $252 million CMS says it collected, the OIG was only able to find documentation supporting the collection of $120 million.
In order for CMS documentation to be adequate in the eyes of the OIG, it must prove the overpayment occurred, prove the overpayment was recorded in its accounting system, and list the source of the recovery amount it used to offset the overpayment.
“CMS did not have adequate policies and procedures for obtaining the appropriate documentation needed to support collected overpayments, for properly managing and maintaining documents and records, or for making documents and records readily available for examination,” according to the report.
In addition, the OIG conducted this audit to analyze how CMS responded to its recommendations for corrective action from a similar 2012 audit. According to the 2012 report, CMS agreed to implement four of the OIG’s six suggestions.
The recent report revealed CMS had only fully implemented two of those recommendations as of June 2020. It pursued legislation to extend the limitation period in section 1870 of the Social Security Act (SSA) and ensured that its staff recorded collection information in its audit tracking and reporting system.
However, the OIG said CMS failed to provide Medicare Administrative Contractors (MAC) with documentation guidelines and did not monitor documentation submissions close enough to ensure they were adequate.
Similar to its 2012 report, the OIG provided several recommendations for corrective action. Among these suggestions was for CMS to revise 42 CFR § 405.980 and corresponding manual instructions related to the reopening period for claims to comply with section 1870 of the SSA.
CMS agreed to continue collecting the $226 million in overpayments it originally reported as uncollected, but it generally did not concur with a majority of the OIG’s findings and other recommendations.
Revenue integrity professionals should monitor CMS’ recoupment activities and be aware that the agency may step up its efforts. Conduct internal audits to ensure that documentation, coding, and billing comply with CMS’ requirements. Follow up on the status of identified overpayments and current or potential CMS recoupment efforts.