Senators Request Audit of CMS Internal Oversight Processes

On March 12, 2024, several senators wrote a letter to the Government Accountability Office (GAO) Comptroller General, requesting an investigation into the policies and procedures CMS has in place to prevent Medicare fraud, waste, and abuse. The senators noted that in 2022, GAO estimated there were $47 billion in improper Medicare payments with $1.7 billion being reclaimed, representing a 2.8% recovery rate.

The senators’ letter was likely prompted by a recent investigation from the National Association of Accountable Care Organizations (NAACOS), which uncovered an alleged fraudulent urinary catheter scheme. NAACOS discovered that ten medical device companies went from billing 15 patients for catheters to over 500,000 patients for catheters within a period of two years. This alleged scheme has been estimated to cost CMS over $2 billion and has garnered significant media attention. Of particular concern to the senators is the fact that NAACOS publicly commented on this issue prior to any announcements from CMS.

The senators noted that this alleged scheme highlights “critical vulnerabilities” within CMS’ fraud, waste, and abuse policies. To this point, they requested that the fraud prevention measures of the Medicare Fraud Strike Force, a team with representatives from the Department of Health and Human Services (HHS), Office of Inspector General (OIG), and Federal Bureau of Investigation (FBI), should be investigated by GAO in order to identify weaknesses and areas for improvement.

Specifically, the senators asked GAO to investigate and answer questions such as an estimate of total alleged Medicare fraud in 2023 including identification of improper urinary catheter billing, how CMS communicates with key stakeholders when a concerning fraud trend arises and if this communication process could be improved, and what the HHS-OIG procedures are for ensuring a reported fraud scheme is taken seriously. They further requested that GAO probe the vulnerabilities of CMS’ Fraud Prevention System (FPS) including how the FPS plans to update detection tools, and the costs/benefits of implementing fingerprint based criminal background checks for high-risk providers enrolled in CMS.

Notably, the senators also asserted that fraud investigations should prioritize investigating bad actors instead of auditing all providers. They asked GAO to identify how CMS is coordinating data to distinguish between fraudulent actors and legitimate providers, and how HHS-OIG prioritizes the investigations of these bad actors over legitimate providers. They further requested that there be an assessment of how provider audits influence the ability of smaller healthcare providers to serve their communities. These requests from the senators highlight the growing concerns from many good faith providers regarding burdensome and costly CMS audits.

GAO has not yet publicly commented on or responded to the senators’ letter. In the meantime, OIG has taken note of the alleged urinary catheter scheme and has asked the public to report any signs of potentially fraudulent activity to the HHS-OIG Hotline. Providers and DME suppliers who provide or bill for urinary catheters should take steps to review their processes in order to strengthen compliance with CMS billing and coverage guidelines and be on alert for audits in this area.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in healthcare law and regulation. If you or your healthcare entity has any questions pertaining to Medicare audits or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.