Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
O F M
  VER  OUR  ILLION 
 
M S
  EDICARE  UMMARY 
 
N M T
  OTICES  AILED  O 
 
B W N
ENEFICIARIES  ERE  OT 
D 2012 
ELIVERED IN 
 
Stuart Wright 
Deputy Inspector General 
for Evaluation and Inspections  
 
January 2014 
OEI-03-12-00600   
EXECUTIVE SUMMARY:  OVER FOUR MILLION MEDICARE SUMMARY NOTICES 
MAILED TO BENEFICIARIES WERE NOT DELIVERED IN 2012 
OEI-03-12-00600 
 
WHY WE DID THIS STUDY 
 
As part of its efforts to reduce Medicare fraud and abuse, the Centers for Medicare & Medicaid 
Services (CMS) relies on beneficiaries to report suspicious activity identified on their Medicare 
Summary Notices (MSNs).  MSNs are paper forms that summarize processed claims.  Claims  
processors are responsible for providing MSNs to beneficiaries.  If MSNs go undelivered, 
beneficiaries do not have the opportunity to review the services or items billed to Medicare.  The 
Department of Health and Human Services FY 2011  Agency Financial Report identified CMSs 
lack of a policy for addressing undelivered MSNs as a weakness in the agencys financial 
oversight of Medicare contractors.  This study provides information on the quantity of undelivered 
MSNs and the procedures that claims processors use to handle undelivered MSNs. 
 
HOW WE DID THIS STUDY  
 
We requested from CMS any policies regarding undelivered MSNs.  For claims processors in 
operation during 2012, we reviewed their written procedures and survey responses regarding 
tracking and followup procedures for undelivered MSNs.  From claims processors survey 
responses, we determined the number of undelivered MSNs returned in 2012.  In addition, we 
reviewed a purposive sample of 1,445 undelivered MSNs returned to 3 claims processing 
companies during the second full week of January 2013.  For each undelivered MSN in our 
sample, we reviewed beneficiary addresses; identified compromisede.g., stolen or misused 
beneficiary and provider numbers; and calculated total Medicare-allowed amounts. 
 
WHAT WE FOUND 
 
Claims processors reported 4.2 million MSNs as undeliverable to beneficiaries.  Without CMS 
guidance on undelivered MSNs, claims processors tracking and followup procedures are limited 
and varied. Claims processors identified incorrect or invalid beneficiary addresses as the most 
common reason why MSNs were undeliverable. We found that there continues to be a problem  
with incorrectly populated beneficiary addresses in the data systems that claims processors use to 
process MSNs.  Some of the undelivered MSNs reviewed were associated with compromised 
beneficiary or provider identification numbers.   
 
WHAT WE RECOMMEND     
 
Undelivered MSNs that are returned to claims processors cannot be reviewed by beneficiaries as 
a defense against fraud. Therefore, CMS should reduce the likelihood that MSNs are 
undeliverable by ensuring that the address information that claims processors use to print 
addresses on MSNs is complete and properly formatted.  To help promote consistency and 
efficiency in activities related to undelivered MSNs, CMS should provide guidance to claims  
processors about whether and how to track and follow up on undelivered MSNs.  CMS 
concurred with our recommendations.     
TABLE OF CONTENTS 
 
Objectives ....................................................................................................1 

Background..................................................................................................1 

Methodology................................................................................................3 

Findings........................................................................................................6 

Claims processors reported 4.2 million MSNs as undeliverable         

to beneficiaries.................................................................................6 

Claims processors procedures for tracking and following up on 

undelivered MSNs are limited and varied .......................................7
  
Conclusion and Recommendations ............................................................10 

Agency Comments and Office of Inspector General Response .....12 
  
Appendixes ................................................................................................13 

A: Number of Undelivered MSNs Reported by                              

Claims Processors for 2012 ...........................................................13 

B: Agency Comments  ...................................................................14 

Acknowledgments......................................................................................16 

 
 
   
   
OBJECTIVES 
To determine: 
1. 	  the number and nature of undelivered Medicare Summary Notices 
(MSN) returned to claims processors; and  
2. 	  the extent to which Medicare claims processors track and follow up on 
undelivered MSNs. 
BACKGROUND 
Medicare Summary Notices  
The Centers for Medicare & Medicaid Services (CMS) uses claims  
processors to perform the day-to-day claims administration for the 
Medicare fee-for-service program.1   As part of their responsibilities, claims  
processors must provide MSNs to approximately 37 million Medicare 
beneficiaries.2    
MSNs are the primary vehicle by which beneficiaries are notified of 
decisions on their Medicare claims.3 An MSN is a paper form sent to a 
beneficiary that summarizes the claims that have been processed on his or 
her behalf.4  MSNs list the services billed to Medicare, what Medicare 
paid for the services, and what the beneficiary may owe the provider.   
MSNs are sent at least quarterly to beneficiaries for whom claims were 
processed. 
MSNs and Fraud Detection 
MSNs serve as a fraud detection tool that beneficiaries can use to ensure 
that Medicare is paying for services or items that were actually provided to 
them.  CMS recommends that beneficiaries check their MSNs carefully 
for suspicious charges, as services or items appearing on an MSN that 
were never provided may be a sign of fraudulent activity.  In June 2013, a 
CMS official stated that beneficiaries best defense against fraud is to 
check their MSNs for accuracy and to diligently protect their health 
information for privacy.5  An OIG report found that in 2001, almost half 
 
1 The fee-for-service program includes items  and services covered by Medicare Parts A 

and B.   

2 CMS, Medicare Claims Processing Manual, Pub. No. 100-04, ch. 21    10.  

3 Ibid.  

4 A beneficiary  may submit a claim to Medicare for direct reimbursement using Form 
 
CMS 1490S (Patients Request for Medical Payment). In these cases, reimbursement 

checks are included with MSNs sent to beneficiaries. 
 
5 CMS, Medicare Urges Seniors to Join the Fight Against Fraud. Accessed at 
http://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-Releases/2013-Press-
Releases-Items/2013-06-06.html on June 10, 2013.  
Over Four Million Medicare Summary  Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03-12-00600)  1   
   
of beneficiaries who thought they had experienced Medicare fraud 
reported it and most beneficiaries regularly read their claim statements.6   
In recent years, CMS has worked with beneficiaries to redesign the MSN 
to make it easier to spot and report potential fraud on claims submitted for 
their care. CMS expected to begin mailing the new MSN to beneficiaries 
in summer 2013. 
As part of its efforts to reduce Medicare fraud and abuse, CMS relies on 
beneficiaries to report suspicious activity identified on their MSNs.  For 
example, CMS uses beneficiaries  complaints of suspected fraudulent 
billing on their MSNs to enhance its database of compromised beneficiary 
and provider identification numbers, known as the Compromised Number 
Checklist (CNC).7, 8  CMS sends an updated CNC to each benefit integrity 
contractor monthly and incorporates the CNC into its Fraud Prevention 
System, an initiative to identify aberrant and suspicious billing patterns 
prior to the payment of claims. 
Undelivered MSNs 
MSNs sometimes fail to reach the beneficiaries and are returned to claims  
processors. If MSNs go undelivered, beneficiaries do not have the 
opportunity to review the services or items billed to Medicare on their 
behalf. 
CMSs Medicare Claims Processing Manual does not address whether or 
how claims processors should track and follow up on undelivered MSNs.  
The Department of Health and Human Services (HHS) Agency Financial 
Report for both fiscal years 2010 and 2011 highlighted CMSs lack of a 
policy regarding undelivered MSNs, identifying it as a weakness in the 
agencys financial oversight of Medicare contractors.9  These two reports 
stated that when beneficiaries cannot review their MSNs and notify CMS 
of any unusual services or charges, improper payments could go 
undetected. 
 
6 OIG,  Beneficiary Awareness of Medicare Fraud:   A Follow Up, OEI-09-00-00590, 
November 2001.  
7 Beneficiary Medicare identification numbers  are known as Health Insurance Claim  
numbers.  Provider Medicare identification numbers are known as National Provider 
Identifiers.   In  this report, we refer to beneficiary Medicare identification numbers as 
beneficiary numbers and provider  Medicare identification numbers as provider  
numbers.  
8 The CNC includes compromised provider and beneficiary  numbers obtained through  
fraud investigations, reports of security breaches, and complaints from providers or  
beneficiaries.  For example, a beneficiary  number may be considered compromised if it is  
stolen or misused.     
9 HHS, FY 2010 Agency Financial Report and FY 2011 Agency Financial Report, 
November 15, 2010, and November 14, 2011, respectively.  
Over Four Million Medicare Summary  Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03-12-00600)  2   
   
The Social Security Administration (SSA) maintains the address data that  
CMS provides to claims processors.  The SSA address database is updated 
when a beneficiary registers a change of address through SSA or through 
the United States Postal Service (USPS).  In addition, MSNs are sent as 
first class mail, which is forwarded if the beneficiary has provided the 
USPS with a forwarding address. 
Undelivered MSNs and Compromised Numbers.  Undelivered MSNs may 
contain beneficiary or provider numbers that are compromised and have 
been fraudulently used to bill for services that were never provided.  
Sometimes, beneficiaries or providers numbers are stolen or used 
without their knowledge. Other times, the beneficiaries or providers are 
complicit in the scheme, receiving payment for the use of their identifiers.   
If claims billed by fraudulent providers appear on undelivered MSNs, 
noncomplicit beneficiaries do not have the opportunity to detect that 
Medicare was billed for services that they never received.  
METHODOLOGY 
Data Collection 
Documentation and Survey Data.  We requested from CMS any policies 
regarding undelivered MSNs. From the 19 claims processors in operation 
during 2012, we requested standard written procedures used to track and 
follow up on undelivered MSNs.  We requested that claims processors 
provide the total number of undelivered MSNs returned in 2012, as well as 
the total amount paid by Medicare for services listed on these undelivered 
MSNs. In addition, each claims processor completed a survey regarding 
tracking and followup activities for undelivered MSNs.  As part of our 
survey, we asked claims processors about CMSs requirements regarding 
the tracking and review of undelivered MSNs. 
Undelivered MSNs.  For 3 companies that have claims processor contracts, 
we requested that each collect and send for our review the first                  
500 undelivered MSNs received from January 13 to January 19, 2013.  
Table 1 shows the types of claims processed by these three companies.  
 
Table 1: Types of Claims Processed by the Companies That Provided Undelivered MSNs  
Number of Undelivered  
Types of Claims Processed by  Three Selected Companies  
MSNs Requested  
Durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) claims  500 
Part A and Part B claims   500 
Part A, Part B, home health, and hospice claims1  500 
 
Source:  OIG analysis of a purposive sample of undelivered MSNs, 2013. 

1 This particular  company had two claims-processing  contracts.  A single company may have more than one claims-processing 

contract.  We asked that company to provide the first 500 undelivered MSNs  collectively received by its two claims processors.  

Over Four Million Medicare Summary  Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03-12-00600)  3   
   
Using the claim number(s) appearing on undelivered MSNs, we obtained 
the most recently updated claim record data from the Medicare National 
Claims History (NCH) through the Services Tracking, Analysis, and 
Reporting System (STARS).10  These claim records include the                 
Medicare-allowed amount, the type of service, and the beneficiary and 
provider numbers. 
Although we requested 1,500 undelivered MSNs, our purposive sample 
included 1,445 undelivered MSNs. Examples of the 55 undelivered MSNs 
that were unusable for our purposes were those that had missing pages or 
lacked a claim record in the NCH file.  Our final sample included                            
398 undelivered MSNs for Part A services, 483 undelivered MSNs for  
Part B DMEPOS services, and 564 undelivered MSNs for other Part B 
services. These undelivered MSNs were associated with 5,461 claims  
contained in the NCH file.11    
Analysis   
We reviewed and summarized claims processors documentation and 
survey responses regarding their tracking and followup activities for 
undelivered MSNs. From claims processors survey responses, we 
determined the number of undelivered MSNs returned to claims  
processors in 2012. 
We compared each of the beneficiary and provider numbers on the 
undelivered MSNs in our sample to the April 2013 CNC to determine 
whether there were any compromised numbers on claims with allowed 
amounts greater than $0.00.  For each address on the undelivered MSNs in 
our sample, we determined whether the address had been updated in 
STARS as of April 2013.12  Finally, we calculated the total allowed 
amounts associated with claims that appeared in our sample of undelivered 
MSNs. 
 
10 STARS extracts claim information  from the NCH file.  For 98 DMEPOS claims, we 
accessed NCH file claim information from the Integrated  Data Repository. 

11  We could not locate a claim record  on the NCH file for 88  claim numbers that appeared 

on undelivered MSNs in  our sample.  These 88 claims were excluded  from our analysis.  

Other claims that appeared on the same undelivered MSNs as these 88 claims were 

included in  our analysis. 

12 STARS extracts beneficiary information from CMSs Enrollment Database (EDB). 
 
The beneficiarys mailing contact address in the EDB is  populated by address data from 
 
SSA and the Railroad Retirement Board. 

Over Four Million Medicare Summary  Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03-12-00600)  4   
   
Limitations 
Our purposive sample of undelivered MSNs is not representative of all 
undelivered MSNs. It is also not representative of all undelivered MSNs 
returned to the three companies in our review.  Therefore, the results of 
our analysis are limited to the undelivered MSNs we reviewed.   
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency. 
   
Over Four Million Medicare Summary  Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03-12-00600)  5   
   
FINDINGS 
Claims processors reported 4.2 million MSNs as 
undeliverable to beneficiaries 
CMS did not monitor how many MSNs failed to reach Medicare 
beneficiaries during 2012. CMS did not require claims processors to 
report the number of undeliverable MSNs that were returned to them  
during calendar year 2012 and none of the claims processors reported to 
CMS the number of undeliverable MSNs returned that year. 
In 2012, claims processors mailed 194 million MSNs to beneficiaries. 
According to claims processors, approximately 4.2 million MSNs were 
returned as undeliverable in 2012.  However, the volume of undelivered 
MSNs returned in 2012 is likely to be  greater than 4.2 million, as 1 of the   
19 claims processors did not report the number of undelivered MSNs and 
7 claims processors provided data that did not cover the full calendar year.  
In addition, two claims processors reported the number of undelivered 
MSN envelopeswhich may each contain multiple MSNsrather than 
the number of undelivered MSNs.13   The remaining claims processors 
reported either counts or estimates that covered the full calendar year.  
Claims processors reports for the number of undelivered MSNs returned 
in 2012 are shown in Appendix A.       
Claims processors could not provide the total Medicare payment amounts 
associated with these undelivered MSNs.  The allowed amounts associated 
with a sample of 1,445 undelivered MSNs returned in January 2013 
totaled $2.7 million.14    
Some undelivered MSNs were associated with compromised 
numbers 
Of 1,445 undelivered MSNs, 51 included paid claims that were associated 
with compromised beneficiary or provider numbers.  Forty-seven 
undelivered MSNs were associated with compromised beneficiary 
numbers, and four undelivered MSNs  were associated with compromised 
provider numbers. The allowed amounts on these undelivered MSNs 
ranged from $0.11 to $41,546 and totaled $165,983.   
 
13 According to  CMSs Medicare Claims Processing Manual  (Section 10.3.2), if a claims  
processors system allows it to  do so, and  multiple MSNs are available for mailing, the 
claims processor may enclose all MSNs in the same envelope. 
14  Our sample included 398 undelivered  MSNs for Part A  services, 483 undelivered 
MSNs for Part B DMEPOS services,  and 564  undelivered  MSNs for other Part B 
services. 
Over Four Million Medicare Summary  Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03-12-00600)  6   
   
Claims processors procedures for tracking and 
following up on undelivered MSNs are limited and 
varied 
CMS requires claims processors to provide MSNs to Medicare 
beneficiaries, but it has not issued guidance regarding whether or how to 
track and follow up on undelivered MSNs.  In practice, not all claims  
processors track or follow up on undelivered MSNs, and those that do 
utilize a variety of methods.  According to CMS staff, when claims  
processors have requested guidance on the storage of undelivered MSNs, 
CMS has allowed claims processors to destroy the undelivered MSNs.  
However, CMS has not issued a written directive to all claims processors 
on the storage and/or destruction of undelivered MSNs.   
Although many claims processors track some information 
regarding undelivered MSNs, activities are inconsistent across 
claims processors 
Despite a lack of CMS guidance, 16 of 19 claims processors track some  
information regarding undelivered MSNs that are returned to them.  These 
activities include tracking the quantity of undelivered MSNs, recording 
information about undelivered MSNs, and storing undelivered MSNs.     
Tracking the Number of Undelivered MSNs. Twelve of nineteen claims  
processors tracked undelivered MSNs to some extent.  These claims  
processors reported using various techniques, including spreadsheets, 
machines that count the number of returned envelopes containing MSNs, 
and electronic filing systems that store scanned images of returned MSNs.  
Seven of these twelve claims processors could provide exact counts of the 
number of undelivered MSNs returned in 2012.15  Two additional claims  
processors could provide exact counts for only the returned MSNs that 
included checks for beneficiaries. Five of these twelve claims processors 
have written procedures outlining how they track undelivered MSNs. 
Recording Information About Undelivered MSNs. Six of nineteen claims  
processors record information about undelivered MSNs, including 
information listed on undelivered MSNs and information listed on 
beneficiary checks returned with undelivered MSNs.  Among the six claims  
processors that record any information about undelivered MSNs, the most 
common pieces of information tracked were the beneficiary number, the 
beneficiary name, the claims processor contract number, the date the MSN 
was returned, andfor beneficiary checks returned with undelivered 
 
15 Three of these seven claims processors were affiliated with one  company, which  
reported an exact count for the collective undelivered MSNs returned to its three claims  
processors.  
Over Four Million Medicare Summary  Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03-12-00600)  7   
   
MSNsthe check number.  All of these six claims processors have written 
procedures for tracking information regarding undelivered MSNs.   
No claims processors track the allowed amounts associated with 
undelivered MSNs. However, two claims processors track the dollar 
amounts on beneficiary checks returned with undelivered MSNs.  For 
these claims processors, $3.9 million in checks to beneficiaries were 
returned with 26,266 undelivered MSNs in 2012. 
Storing Undelivered MSNs. All but 1 of the 19 claims processors 
eventually destroy some or all of the undelivered MSNs that are returned 
to them.  Eleven of nineteen store undelivered MSNs by keeping the 
originals, electronic copies, or both the originals and electronic copies.  
Four of the nineteen claims processors keep indefinitely only the returned  
MSNs that include checks for beneficiaries.  One claims processor keeps 
all undelivered MSNs and reported spending $34,282 per year on storage.  
Eight of the eleven claims processors that store undelivered MSNs have 
written procedures regarding their storage practices.   
Half of claims processors attempt to verify addresses on 
undelivered MSNs, but few conduct any further followup 
Ten of nineteen claims processors attempt to determine a new or correct 
beneficiary address for any undelivered MSNs returned to them.  All 
10 of these claims processors have written procedures.  As part of their 
efforts, they compare the address for the undelivered MSN to addresses 
listed in the EDB, the Health Insurance Master Record (HIMR),  the 
Common Working File (CWF), and/or the Shared Systems that claims  
processors use to process Medicare claims.16  In 2012, 5 of the 10 claims  
processors that verify addresses did so for all of their undelivered MSNs.  
Two of these claims processors report that they suppress future MSN 
mailings to undeliverable addresses until those addresses have been 
updated in their system.  The remaining five claims processors verified 
addresses only for undelivered MSNs that were returned with beneficiary 
checks, lacked postage, or were not inserted into the envelope properly, 
which accounted for less than 3 percent of their undelivered MSNs in 
2012. 
Despite these efforts to identify new or correct beneficiary addresses, 
claims processors must use the addresses in their data systems for MSNs. 
These addresses come directly from  SSA.  Only beneficiaries can update 
 
16 SSA maintains the beneficiary address data that populate the HIMR, EDB, CWF, and 
Shared Systems.  SSA maintains the Master Beneficiary Record (MBR) from  which the 
HIMR is established, and beneficiary address data are transmitted electronically from the 
MBR to the EDB, from the EDB to the CWF, and  from the CWF to the Shared Systems.  
Over Four Million Medicare Summary  Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03-12-00600)  8   
   
their SSA address information.  When  claims processors identify a new or 
corrected address, they may direct beneficiaries to contact SSA to register 
a change of address. 
Among the sample of undelivered MSNs we reviewed, there were no 
changes made to 71 percent of the corresponding beneficiary addresses 
(1,033 of 1,445) in CMSs system 3 months after the MSNs were returned 
to claims processors. 
Five claims processors attempt to determine the reasons MSNs are 
undeliverable. Two of these five claims processors attempt to determine 
whether the services on undelivered MSNs are associated with a higher 
incidence of fraud, waste, and abuse.  No claims processors refer 
information on undelivered MSNs to program integrity contractors. 
Claims processors identified incorrect or invalid addresses as 
the most common reason MSNs were undeliverable  
Among the five claims processors that attempt to determine the reason(s) 
MSNs were undelivered, the most common reason identified was incorrect 
or invalid addresses. Such addresses may result from formatting errors in 
the data systems used by claims processors to print addresses on MSNs.  
In 2006, CMS recognized that beneficiary address data from the CWF 
were not populating correctly into the Shared Systems because the address 
fields in the two had different line length and character configurations.17   
CMS instructed system maintainers to modify the Shared Systems to 
accept the complete CWF address.18  However, one claims processor 
continued to report that MSNs are returned in part because beneficiary 
address data from the CWF are populated incorrectly into the Shared 
Systems.  In addition, our review of sampled undelivered MSNs identified 
incomplete beneficiary addresses that appeared to result from incorrectly 
populated data. For example, a street address on an undelivered MSN 
might appear as WHERE BLVD, when the street address data in STARS 
was 100 ANY  WHERE BLVD.      
According to claims processors, other reasons MSNs were undelivered 
include that the beneficiary was temporarily away, the addresss 
forwarding order had expired, the MSN had been inserted into the 
envelope improperly, and the envelope did not have sufficient postage.  
Among the undelivered MSNs reviewed, two envelopes were returned 
with handwritten notes indicating that the envelope had insufficient 
postage for a foreign address.   
 
17 CMS, Transmittal 205, Change Request 4224.  CMS Manual System, Pub. No. 100-20, 

Beneficiary Change of Address.  

18 Effective July 1,  2006. 

Over Four Million Medicare Summary  Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03-12-00600)  9   
   
CONCLUSION AND RECOMMENDATIONS 
As part of its efforts to reduce Medicare fraud and abuse, CMS relies on 
beneficiaries to report suspicious activity identified on their MSNs.  In 
fact, a CMS official stated in June 2013 that beneficiaries best defense 
against fraud includes checking their MSNs for accuracy.  However, we 
found that at least 4.2 million MSNs did not reach some of these 
beneficiaries. Therefore, CMS is missing the opportunity to solicit these 
beneficiaries help in the fight against fraud.   
Claims processors are responsible for providing MSNs to Medicare 
beneficiaries, but CMS does not provide claims processors with guidance 
on whether or how to track or follow up on MSNs that are returned as 
undeliverable. In addition, the HHS FY 2011  Agency Financial Report  
identified CMSs lack of a policy for addressing undelivered MSNs as a 
weakness in CMSs financial oversight of Medicare contractors.  While 
we do not know the amount paid by Medicare for services associated with 
undelivered MSNs, it may total hundreds of millions of dollars.   
Without guidance for handling undelivered MSNs, claims processors have 
developed their own approaches. However, these approaches are not 
consistent across the Medicare program  because not all claims processors 
track or follow up on undelivered MSNs and those that do use a variety of 
methods.     
Among claims processors that attempt to determine reasons MSNs are 
returned as undeliverable, the most common reason identified was 
incorrect or invalid addresses. We found that that there continues to be a 
problem with incorrectly populated beneficiary addresses in the data 
systems that claims processors use to process MSNs.   
We recommend that CMS: 
Provide guidance to claims processors about handling MSNs 
that are returned as undeliverable 
To help promote consistency and efficiency in activities related to 
undelivered MSNs, CMS should provide guidance to claims processors 
about whether and how to track and follow up on undelivered MSNs.  This 
guidance should include instructions to claims processors about whether 
or when and how to: 
   destroy or store undelivered MSNs, 
   keep a record of the number of undelivered MSNs, 
   record information about undelivered MSNs, 
   verify beneficiary addresses for undelivered MSNs,  
Over Four Million Medicare Summary  Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03-12-00600)  10   
   
 	  ensure that claims processors encourage beneficiaries to register a 
change of address with SSA when the claims processor is made aware 
of a new or corrected address, 
	   analyze information on undelivered MSNs to identify patterns 
indicative of potential fraud and abuse, and 
	   refer information on undelivered MSNs to program integrity 
contractors. 
Ensure that the address information used by claims 
processors to print addresses on MSNs is complete and 
properly formatted  
CMS should reduce the likelihood that MSNs are returned as 
undeliverable by ensuring that claims processors have access to the 
complete beneficiary address information maintained by SSA.  Since 
July 2006, CMS has instructed system maintainers to ensure that the 
Shared Systems used by claims processors accept the complete beneficiary 
address from the CWF.  CMS should ensure that the Shared Systems 
contain beneficiary addresses that match the addresses on file in the CWF.  
Given that we saw examples of incomplete addresses on our review of 
undelivered MSNs, CMS should also ensure that claims processors are 
formatting addresses correctly for printing on MSNs. 
   
Over Four Million Medicare Summary  Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03-12-00600)  11   
   
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL  
RESPONSE 
CMS concurred with both of our recommendations.  Regarding the first 
recommendation, CMS stated that its Office of Communication will work 
with the Center for Medicare and with claims processors Contracting 
Office Representatives to develop instructions as to what claims  
processors should do with undelivered MSNs that are returned to them.  In 
addition, CMS stated that it will also  explore with claims processors the 
possible actions that can be taken, within reasonable costs, to reduce the 
number of returned MSNs.   
In response to our second recommendation, CMS stated that it will work 
with SSA to determine if addresses are being altered between when SSA  
provides them to CMS and when the claims processors retrieve them from 
the CWF.  CMS reported that if it finds that the addresses are being altered 
in any manner, it will work with appropriate parties to rectify the situation.   
OIG agrees that this is an appropriate step to take to ensure that 
beneficiaries are receiving their MSNs.   
OIG agrees that reducing the number of returned MSNs is an important 
step in protecting the integrity of Medicare.  Ensuring that more 
beneficiaries receive their MSNs increases the opportunity for 
beneficiaries to participate in the fight against Medicare fraud and 
improper payments.       
The full text of CMSs comments is provided in Appendix B. 
 
   
Over Four Million Medicare Summary  Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03-12-00600)  12   
   
APPENDIX A 
Number of Undelivered MSNs Reported by Claims Processors for 2012 
Table A-1 provides the number of undelivered MSNs reported by each of the 19 claims  
processors in operation during calendar year 2012.        
 
Table A-1: Number of Undelivered MSNs Reported By Claims Processors for 2012  
Claims Processor1   Number of Months for Which  Number of  
Claims Processors Reported Data   Undelivered MSNs 
Claims Processor 1   12  260,000  
Claims Processor 2   12  245,000  
Claims Processor 3   12  214,000  
Claims Processor 4   12  454,739  
Claims Processors 5, 6, and 7 combined2  11  624,527  
Claims Processor 8   12  180,000  
Claims Processor 9   11  65,000  
Claims Processors 10 and 11 combined3  12  1,057,266  
Claims Processor 12   11  178,835  
Claims Processor 13   4  146,319  
Claims Processor 14   12  181,889  
Claims Processor 15   12  233,997  
Claims Processor 16   Not provided  Not provided  
Claims Processor 17   12  126,000  
Claims Processor 18   12  203,000  
Claims Processor 19   4  64,000 
 Total   4,234,572  
 
Source:  OIG analysis of  claims processor surveys, 2013. 

1  We  assigned a unique identifier to each of  the 19  claims processors in operation in 2012. 

2 Claims processors 5, 6, and 7 are affiliated with the same company, which reported  the collective number of undelivered MSNs returned 

to the  three claims processors. 
  
3 Claims processors 10 and 11 are affiliated with the  same company, which reported the collective number of undelivered MSNs returned to 

the two claims processors. 
  
 
Over Four Million Medicare Summary  Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03-12-00600)  13  APPENDIX 8 
Agency Comments 
(::f-
~~_.-.f>~"lC~ l
i-t,

DEPARIMENT OF HEALTii & HUMAN SERVICES  Centers for Medicare & Medicaid Services 
Administrator 
Washington, DC 20201 
DATE:  JAN -6 2014 
TO:  Daniel R. Levinson 
Inspector General 
FROM:  Marilyn Tavenner 
Administrator 
SUBJECT:  Office oflnspector General (OIG) Draft Report:  Over Four Million Medicare 
Summary Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03
12-00600) 
The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to review and 
comment on the above referenced OIG draft report. The objectives of the report were to 
determine: (1) the number and nature of undelivered Medicare Summary Notices (MSN) 
returned to claims processors; and (2) the extent to which Medicare claims processors track and 
follow up on undelivered MSNs. 
The CMS response to each of the OIG recommendations follows: 
OIG Recommendation: 
The OIG recommend that CMS provide guidance to claims processors about handling Medicare 
Summary Notices (MSNs) that are returned as undeliverable. 
CMS Response: 
The CMS concurs with this recommendation. The Office ofCommunication will work with the 
Center for Medicare and the Medicare Administrative Contractor's (MAC) Contracting Officer 
Representative (CORs) to draft a continuing resolution that will provide instructions to the 
claims processors on what they should do with undelivered MSNs that are returned to them. 
CMS will also explore possible actions with the MACs that might reduce the number of returned 
MSNs that can be performed within reasonable costs. 
OIG Recommendation: 
The OIG recommend that CMS ensure that the address information used by claims processors to 
print addresses on MSNs is complete and properly formatted. 
Over Four Million Medicare Summary Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03-12-00600)  14   
   
   
Over Four Million Medicare Summary  Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03-12-00600)  15   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Robert A. Vito, Regional 
Inspector General for Evaluation and Inspections in the Philadelphia 
regional office, and Linda M. Ragone, Deputy Regional Inspector General.  
Tanaz Dutia served as the team leader for this study.  Other Office of 
Evaluation and Inspections staff from the Philadelphia regional office who 
conducted the study include Joanna Bisgaier, Nancy J. Molyneaux, and 
Russell Tisinger.  Central office staff who provided support include 
Scott Manley and Christine Moritz. 
 
Over Four Million Medicare Summary  Notices Mailed to Beneficiaries Were Not Delivered in 2012 (OEI-03-12-00600)  16   
Office of Inspector General
http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as  
amended, is  to protect the integrity of the Department of  Health and Human Services  
(HHS)  programs, as well as the health and welfare of beneficiaries  served by those 
programs.  This statutory mission  is  carried  out through  a nationwide network  of  audits, 
investigations, and inspections conducted by the  following operating components: 
Office of Audit Services 
The Office  of  Audit Services  (OAS) provides auditing services  for HHS, either by  conducting  
audits  with its own audit resources or by  overseeing  audit work done by others.  Audits  
examine the performance of HHS programs and/or its grantees and contractors in carrying  
out their respective responsibilities and are intended  to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and  
mismanagement and promote economy and efficiency  throughout  HHS. 
Office of Evaluation and Inspections 
The Office  of  Evaluation and Inspections (OEI)  conducts national evaluations to  provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud,  waste, or abuse  and promoting  
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations  
of  fraud and misconduct  related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI  utilizes its resources 
by actively  coordinating with the Department  of Justice  and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to  criminal 
convictions, administrative sanctions,  and/or  civil monetary  penalties.  
Office of Counsel to the Inspector General 
The Office of Counsel to the  Inspector  General (OCIG) provides general legal services to 
OIG, rendering  advice and opinions on HHS programs and operations and  providing all  
legal support for OIGs  internal operations.  OCIG represents  OIG in all civil and 
administrative fraud and abuse cases involving HHS programs,  including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In  connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program  guidance, publishes fraud alerts, and provides other  
guidance  to  the health care industry concerning the anti-kickback statute and other  OIG  
enforcement authorities.