CAGW Names CMS Admin Marilyn Tavenner September Porker of the Month

(Washington, D.C.) – Today, Citizens Against Government Waste (CAGW) named Centers for Medicare and Medicaid Services (CMS) Administrator Marilyn Tavenner its September Porker of the Month for CMS’s dismal record on financial accountability, coupled with the virtual dismantling of one of the federal government’s most effective improper payment recovery programs. 

A September 23, 2014 report by the Government Accountability Office (GAO), Congress’ nonpartisan watchdog agency, highlights CMS’s inability to properly account for $3.7 billion in expenditures associated with the implementation of the Affordable Care Act (ACA).  The GAO was unable to independently verify the reliability of the financial information provided by CMS due to a flawed recordkeeping system.  Medicare is plagued with the highest reported amounts of improper payments of any federal program, and the Medicare Trust Fund, already in the red and on track to reach insolvency by 2026, needs every penny it can get to continue meeting the needs of current beneficiaries. 

The GAO report comes on the heels of an August 29, 2014 CMS decision that offers acute care and critical access hospital providers an opportunity to settle all medical claims pending at the Administrative Law Judge (ALJ) level of appeals for 68 cents on the dollar.  These claims were previously rejected by recovery audit contractors (RACs) for being medically unnecessary, and they contribute significantly to Medicare’s dismal improper payment record.

On July 8, 2014, the Council for Citizens Against Government Waste (CCAGW) sent a letter to members of the Senate Special Committee on Aging to clarify some common misconceptions about Medicare’s RAC program, a highly successful post-payment auditing tool used to reduce improper payments in Medicare. The letter reiterated the important role RACs play in identifying areas vulnerable to improper payments.  Figures released by CMS on September 1, 2014 revealed that RACs have returned more than $8.9 billion to the Medicare Trust Fund and more than $700 million to providers since 2009.

In the statement released on Labor Day weekend, CMS encouraged hospitals to “make use of this administrative agreement mechanism to alleviate the administrative burden of current appeals on both the hospital and Medicare system.”  A December 13, 2013 CMS report found that RACs have an average accuracy rate of 95.2 percent, while only 7 percent of all RAC determinations are overturned on appeal.  CMS’ capitulation on the appeals process not only means potentially hundreds of millions, if not billions, of dollars in losses to taxpayers, but it also eviscerates a highly successful post-payment audit process.  Given these realities, the decision to appease disgruntled and non-compliant hospitals is not only egregious, but completely irresponsible.

“The GAO report underscores the imperative for CMS bureaucrats to work harder to prevent the hemorrhaging of taxpayer dollars.  That means developing and maintaining a rational recordkeeping system to track detailed financial information, as well as broadening the scope of the RAC program, one of the most successful tools to protect taxpayers and Medicare beneficiaries from rampant improper payments,” said CAGW President Tom Schatz.

For her failure to establish reliable accounting procedures, while allowing CMS to undercut the success of the current RAC program—and by extension, the solvency of the Medicare Trust Fund—CAGW names CMS Administrator Marilyn Tavenner its September Porker of the Month.

Citizens Against Government Waste is the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement, and abuse in government.

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