On June 30, 2011, the Government Accountability Office (GAO) released a report about the Center for Medicare and Medicaid Services’s (CMS) incompetence in curtailing waste, fraud, and abuse. For more than 20 years, GAO has deemed Medicare a high-risk program, and applied the same label to Medicaid since 2003. GAO justifies the high-risk distinctions by citing both programs’ “susceptibility to improper payments—estimated to be about $70 billion in fiscal year 2010.”

CMS has attempted to bring improper payments to heel through two initiatives: the Integrated Data Repository (IDR) and One Program Integrity (One PI) programs. The GAO report proves that these initiatives have fallen woefully short of their goals.

CMS’s efforts to reduce overpayments rely on the IDR program, which is supposed to be a comprehensive, centralized data set that incorporates all of the Medicare and Medicaid data that program administrators need to identify improper payments. To maximize the IDR’s utility, CMS needs to constantly refresh the information in the database, yet GAO asserts that IDR currently “does not include all the data that were planned to be incorporated by fiscal year 2010. For example, IDR includes most types of Medicare claims data, but not the Medicaid data needed to help analysts detect improper payments of Medicaid claims. IDR also does not include data from other CMS systems that are needed to help analysts prevent improper payments, such as information about claims at the time they are filed and being processed.”

The One PI program is suffering from similar information gaps and mismanagement. While it was designed to make IDR information accessible, the GAO reports that “few program integrity analysts [are] trained and using the system. One PI program officials planned for 639 program integrity analysts to be using the system by the end of fiscal year 2010; however, as of October 2010, only 41” were online.

CMS officials attempted to deflect blame for their agency’s latest failure by citing technical problems and funding delays. However, the GAO reported that “the agency has not finalized plans or developed reliable schedules for efforts to incorporate these data.”

Far from levying unfairly harsh judgment, GAO may have been kind to CMS by accepting the $70 billion annual Medicare and Medicaid overpayment estimate. In a 2009 television interview, Sen. Tom Coburn (R-Okla.) stated that Medicare alone loses $80 billion a year to fraud overpayments. Even using the $70 billion figure, CMS’s projected $21 billion in savings does not nearly address CMS’s overpayment problems.

The woeful mismanagement of taxpayer money is best summed up by GAO’s statement that CMS “is not yet positioned to identify, measure, and track benefits realized from its efforts. As a result, it is unknown whether IDR and One PI as currently implemented have provided financial benefits.” The GAO report inexorably leads to the judgment that CMS’s efforts to stamp out overpayments have been a profound failure.

- Christopher P. Ryan