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GAO Report Criticizes CMS Audit Processes, Inefficiencies

Article by Ryan Ball, VGM, Published in VGM Legislative Update

Earlier this week, the Government Accountability Office (GAO) released a report entitled "Increasing Consistency of Contractor Requirements May Improve Administrative Efficiency."  Members of Congress pressed GAO to look at issues that have arisen about the efficacy of claim reviews by Medicare contractors, which includes RAC, ZPIC and CERT auditors, as well as the regional MAC's.

The report states that while the different types of contractors have a similar process for postpayment audits, there are glaring irregularities in the requirements for the different entities. Oversight in which claims are selected, staffing of those reviewing claims, deadlines for providers to satisfy requests for additional documentation and overall communication from contractors to providers about the process and potential penalties for missing certain deadlines. 

In an unofficial confirmation of these issues, VGM has heard from several members who are receiving letters from CMS  detailing the average wait time associated with getting a hearing scheduled with an Administrative Law Judge (ALJ) on claims that have been through the first two stages of appeal with CMS contractors. The letters, from the HHS Office of Medicare Hearings and Appeals, are vastly different. One states the average wait time for an ALJ hearing is 171 days, while another stated 223 days and was in response to an appeal filed in November 2012! Seemingly apologizing for the incompetence of those running the program, the letters state "We regret that due to the large volume of appeals currently in process, your appeal may not be scheduled for a hearing as swiftly as we would like."

The GAO report detailed the above differences and stated that they may impede the effectiveness of claims audit programs. The lack of a clear process, or a clear definition of, which claims are being audited by which contractors, are points that have frustrated providers across the board since the audit programs were accelerated in years past. 

GAO recommends CMS take several actions, although they do not go nearly as far as providers would like, they are atleast attempting to bring some oversight to the independent contractors that are wreaking havoc on orthotic and prosthetic providers billing Medicare. The report notes that the recommendations below are supported by CMS.

1. Examine all contractor postpayment review requirements to determine those that could be made more consistent.
2. Communicate its findings and time frame for taking action.
3. Reduce differences where it can be done without impeding efforts to reduce improper payments.

VGM will continue to press elected officials and other federal agencies to bring more transparency and legitimacy to Medicare contractors. The VGM Group worked with industry leaders to develope an Audit White Paper discussing many of the shortcomings of the current system and making potential recommendations to change the program. If you have ideas about other potential solutions to these issues, please contact us directly at or visit and someone from VGM will follow up with you.

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