Kusserow’s Corner: OIG Work Plan has its Sight on CMS Contracting and Contractors

The HHS Office of Inspector General (OIG), in its just-released “Work Plan for FY 2014,” notes that CMS obligated $4.8 billion under contracts for a variety of goods and services. The recent mess relating to the contractor responsible for HealthCare.gov has only underscored the interest in fortifying contractor oversight. In December, HHS Secretary Sebelius requested the OIG to review the acquisition process for contracts to launch the site, including:

  1. how the contractors were selected;
  2. a review of the contract administration;
  3. overall project management;
  4. whether performance was adequately monitored; and
  5. whether contract specifications were met.

In fact, a number of related concerns by the Secretary have resulted in a number of projects being included in the OIG Work Plan. Much of the work will focus on the Medicare contractors, such as the Zone Program Integrity Contractors (ZPICs), Medicare Administrative Contractors (MACs), Medicare and Medicaid programs, Recovery Audit Contractors (RACs), etc. The OIG noted in this connection that previous work by it and the General Accountability Office (GAO) has found vulnerabilities and weaknesses within the contracting environment at CMS that warrants continued attention. Examples of the new initiatives include the OIG Office of Evaluation and Inspection (OIE) conducting a review of the contract management at CMS to examine its oversight of contractors, and the Office of Audit Services (OAS) reviewing the administrative costs claimed by Medicare contractors. The OIG will be looking at controls to determine the accuracy of eligibility for enrollment and subsidy payments, selection of contractors, contract types, “and the rationale for these selections.” There is a separate new project to determine “whether performance-based contracting was used to determine payments to contractors; whether contractors were paid appropriately.”

These reviews will follow on other work already completed. The OIG, about the same time of the posting of its Work Plan, also released a report on “Medicare Administrative Contractors’ Performance,” the subject of another blog article. The OIG noted that billions of dollars have been awarded to these MACs to support their critical role in administering the Medicare program, and as such warranted effective oversight of their performance to ensure that they are adequately processing claims and performing other assigned tasks.

In previous blog articles, I referred to another contract management issue related to management of the process for hospital appeals specific to RACs. The backlog on appeals by contractor determinations is so long that there has been a suspension in appeals of contractor decisions by providers for two years. The American Hospital Association (AHA) position is that, in most cases, hospitals have been sustained on appeals to ALJs and the suspension harms them in permitting money denied by RACs to go without an opportunity for appeal. AHA suggests having the RACs suspend actions until the Claims Appeals process is fixed. This will certainly continue to draw attention and action in the coming months.

All in all, it is reasonable to expect that there will many new initiatives in the CMS contractor arena, including CMS, OIG, GAO, and Congress.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Copyright © 2014 Strategic Management Services, LLC. Published with permission.