Administration urges HHS to continue fight against fraud

In a letter recently made public, Office of Management and Budget (OMB) Director Shaun Donovan reminded HHS Secretary Sylvia Burwell that the reduction of improper payments is a “key priority” for the Obama Administration, as is the integrity of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) private health insurance programs. After highlighting the billions of dollars in improper payments made by Medicare and Medicaid, Donovan asked Burwell to submit a corrective action plan by April 30, 2015. Information about any plan submission has not been made public.

Request for corrective action plan

In the February 26, 2015 letter, Donovan noted that Medicare fee-for-service improper payments—“payments made to the wrong entity, in the wrong amount, or for the wrong reason”— increased by $9.7 billion over the previous year, while improper Medicaid payments increased by $3.1 billion. Donovan referred Burwell to Appendix C (Requirements for Effective Estimation and Remediation of Improper Payments) of OMB Circular A-123, Management’s Responsibility for Internal Control. The Appendix was revised and the modifications became effective in fiscal year (FY) 2014.

The modifications were intended to “create a more unified, comprehensive, and less burdensome set of requirements” by streamlining requirements, eliminating duplicative requirements, establishing new categories for reporting improper payments, introducing a new internal control framework, and providing guidance to agencies to increase the statistical validity of estimates. Donovan directed Burwell to have her senior accountable official review the new improper payment reporting categories, provide a corrective action plan that identifies root causes of improper payments in HHS programs and lists milestones along the path to meeting payment reduction targets, and develop plans to ensure that internal controls are working.


Donovan also emphasized the importance of program integrity in the ACA-created health insurance marketplaces and related programs. The HHS Office of Inspector General (OIG), along with the Department of the Treasury, he noted, will perform “comprehensive risk assessments” to determine what weaknesses might exist that could affect payment accuracy. The HHS OIG echoed this focus in its Fiscal Year 2015 Health Reform Oversight Plan (see Marketplaces, premium tax credits remain an OIG focus in FY 2015, Health Reform WK-EDGE, March 4, 2015).

Publication of letter

The February 26, 2015, letter was made public as part of a court order in Schulte v. U.S. Department of Health and Human Services. Schulte, a reporter for the Center for Public Integrity (CPI), and the CPI brought a Freedom of Information Act (FOIA) suit against HHS, alleging that it failed to respond to a request for Medicare Advantage records in a timely manner (see HHS sued for failure to release Medicare Advantage billing information, Health Law Daily, May 28, 2014).