Grassley to CMS: Tighten up contract oversight

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Sen. Chuck Grassley, R-Iowa, recently sent a letter to U.S. Department of Health and Human Services' (HHS) Secretary Kathleen Sebelius and Centers for Medicare & Medicaid Services' (CMS) Administrator Donald Berwick reiterating his concerns that CMS is not properly overseeing its contractors.

In a letter dated Oct. 6, Grassley wrote that the lack of oversight of contractors is "alarming," pointing to agency oversight of contractors responsible for adjudicating and processing Medicare claims, locating and addressing waste, fraud or abuse, and improving the quality of healthcare provided to Medicare beneficiaries.

“CMS is not holding contractors accountable when those contractors fail to carry out their responsibilities or fulfill contract terms,” Grassley wrote. “CMS does not seem to examine its contractors’ role in enabling taxpayer dollars to be misused or wasted and to hold contractors accountable if they fail to carry out their responsibilities as expected. CMS needs to do what it takes to make sure these contractors don’t waste taxpayer dollars.”

Previously, Grassley raised concerns about program safety contractors, tasked with locating and addressing waste, fraud or abuse, failing to adequately open new investigations or refer cases to law enforcement when appropriate. Grassley also expressed concern about the apparent lack of accountability by Medicare Quality Improvement Organizations, tasked with improving the quality of healthcare provided to Medicare beneficiaries.

He also noted that, according to the Office of Inspector General, $4.7 million worth of improper payments were made to providers in 2009. Forty percent of the improper payments made by CMS’ contractors were made to inpatient hospitals while 25 percent went to durable medical equipment suppliers, 12 percent to hospital outpatient departments and 7 percent to physicians.

Grassley posed these questions to CMS:

  • Has CMS taken any actions this year to ensure that contractors are held accountable when they do not fulfill their tasks as set forth in their contract, agreements or other legal arrangements with CMS?
  • What is HHS doing to ensure that CMS effectively oversees and manages its contractors to prevent fraud, waste and abuse in the Medicare and Medicaid programs?

He also asked CMS to specify whether it believes it requires additional authority in order to hold its contractors accountable for inadequate work or substandard performance.

In his letter, Grassley requested a response no later than Oct. 20.