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GAO Tells CMS Pre-Pay Editing/Auditing on Claims Should Be Greater As Processes Not Catching Enough–Time To Start Cranking

Posted Dec 14 2012 11:59pm

When you read this the GAO identifies 3 different areas to where the processes for the edits have weaknesses, so you have to fix the code and alter the algorithms if you want it to function differently.  I don’t know how many folks CMS has on board to do this or if all of it it outsourced but in the IT Infrastructure world we live in that’s what you do.  Claims processing is a pretty complex business these days and the way billing is done constitutes a complex editing system too. 

It’s easy to find these shortcomings but takes a while to write some code and test it and so forth and I keep telling everyone “the short code kitchen burned down a few years ago and there was no fire sale”.  This is what we are talking about here, code.  Code is what makes an algorithm do something.  Flaws in the edit as noted, rewrite the code to fix it.  Incomplete assessment, once again fix the code.  Documentation missing, add audit tables perhaps in addition to what is there with new triggers to catch more of the processes. 

It’s faster and easier to find these things than it is to write code to fix them for sure.  So in short I guess GAO is telling CMS to get some new code or fix what they have.  In addition, Medicare contractors, most of which are subsidiaries of insurance companies were somewhat called to task here as well as that’s what they do, process and edit claims.  According to this article CMS is not doing the proper amount of overseeing how the insurer subsidiaries as contractors are handling the job and they make a lot of money from the government with these contracts. Basically the GAO gave CMS a list of IT Infrastructures they need to improve or fix.  You also have some weird things like this to consider…as mergers and acquisitions grow money in one area could be an expense for another subsidiary or section of one. 


Now we have the big stink on the stimulus incentives so what did this subsidiary of WellPoint do that received $5.5 million to ensure proper accounting?  Yes one more nightmare for CMS to check out I guess since now everyone is focused on this item.  They were already in hot water two years ago for not auditing for fraud on Medicare claims and here we are a couple years later and GAO is saying the same thing. It’s those doggone IT Infrastructure updates maybe running behind? 

We can go over here and look at the CMS policy or no policy I should say for prepayments on Medicare Advantage plans where insurers make money on holding Funds for around 46 days to collect interest income, government eats that too. 

Insurers Made $450 Million with Interest Income by Holding Medicare Funds for Around 46 Days Before Releasing Payment

In essence the GAO just gave CMS a lot code and integration efforts to create  with Medicare contractors so there’s less that slips through.  They have a big job with what GAO has pointed out and it will take some time.  Some of the parameters of the queries running might be easily adjusted as those are adjusted in some areas up and down from time to time.  The queries run to analyze patterns and find errors. 

As reported in this article too CMS tried to give contractors some better incentives and they were only 3 percent so with the big money health insurers make as a whole, I guess they didn’t bust their fannies too much and CMS efforts in pay for performance maybe didn’t have a model that could work? Not only CMS but a lot of companies to include banks today are struggling to find models that work and it’s complex world of code that creates those for the rest of us to use. BD

Now after reading all of this, one item to pay attention to that I think I should mention and that was during the campaign about re-doing Medicare with vouchers..after you read this article and saw some complexities here, it would never happen so all the chatter over it was just that chatter as the IT Infrastructure and cost and time would be way too prohibitive to uproot the whole system.  Sure in design it sounded simpler with taking some of the accounting out for some, but it would never work, way too complex so all that talk you heard about the Ryan voucher system….vapor:)  This is not an opinion but rather facts and good guestimates as all this costs money and time to write a lot of computer code, algorithms and biz models to make something like that a reality, plus about 5 to 6 years to develop and even at that such a huge job it may have required outsourcing to both India and China to find enough software engineers.  BD 



Use of prepayment edits saved Medicare at least $1.76 billion in fiscal year 2010, but a new study by the Government Accountability Office found that savings could have been greater had the edits been more widely used.

According to GAO, the Centers for Medicare & Medicaid Services (CMS) reported an improper payment rate of 8.6 percent ($28.8 billion) in the Medicare fee-for-service program for fiscal year 2011.
To help ensure that payments are made properly, CMS uses controls called edits that are programmed into claims processing systems to compare claims data to Medicare requirements in order to approve or deny claims or flag them for further review.

GAO officials said the study was conducted because GAO was asked to assess the use of prepayment edits in the Medicare program and CMS’s oversight of Medicare administrative contractors (MACs), which process claims and implement some edits.

GAO concluded that CMS should take seven actions to strengthen its use of prepayment edits, including restructuring some edits; centralizing implementation of others; fully documenting processes; encouraging more information sharing about effective edits; and assessing the feasibility of increasing incentives for edit use

http://www.govhealthit.com/news/gao-tells-cms-pre-pay-edit-savings-should-be-greater

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