April 2008
Medicare payment errors, Medicaid program administration, and Part D oversight are among top management challenges and high-risk areas for the Department of Health and Human Services, as identified in a recent report by the HHS Office of Inspector General (OIG).
The OIG defined 10 areas of ongoing concern for HHS and assessed progress the department has made in addressing problem areas. The report, released February 20 by the OIG, was first contained in the Fiscal Year 2007 HHS Agency Financial Report, published in November 2007.
The OIG said oversight of the Part D program is among the top challenges for the agency. The Centers for Medicare & Medicaid Services (CMS) has "demonstrated progress" in protecting the prescription drug benefit from fraud abuse, the OIG said, but noted that additional safeguards are needed.
The report also identified Medicare payment integrity as a key management issue for HHS. The OIG said audits and evaluations of Medicare payments continued to show "serious internal control weaknesses in [Medicare’s] financial systems and processes."
In addition, the OIG said that although CMS has demonstrated "vigilance" in reducing overall paid claims error rates, significant improper payments continue to occur in specific areas of the Medicare program, such as in the area of durable medical equipment (DME). The OIG noted in the report, though, that CMS has begun addressing overpayments in DME.
Other top areas of concern include appropriateness of Medicaid and State Children’s Health Insurance Plan payments and the administration of the Medicaid program.
The OIG said that until 2007, little was known about Medicaid payment error rates, but that CMS has begun assessing Medicaid improper payments and will fully roll out the payment error rate testing program for Medicaid in 2008.
Furthermore, the OIG raised long-standing concerns about problems with state Medicaid financing arrangements involving intergovernmental transfers.
"Once payments are returned to state governments through IGTs, funds cannot be tracked, and they may be used by the states for purposes unrelated to Medicaid," the OIG said.
The report highlighted some steps CMS has taken to address the problem, including regulations meant to curb abuses by states. The report also discussed HHS management challenges and agency progress in dealing with quality-of-care problems and oversight of food, drug, and medical device safety through the National Institutes of Health and the Food and Drug Administration.
The OIG report is available at www.oig.hhs.gov/publications/challenges/files/TM_Challenges07.pdf.
The full HHS agency financial report is available at www.hhs.gov/afr/index.html.
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