Medicare Fraud: Further Actions Needed to Address Fraud, Waste, and Abuse
Published: 2014-06-25T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: GAO has designated Medicare as a high-risk program, in part because the program's size and complexity make it vulnerable to fraud, waste, and abuse. In 2013, Medicare financed health care services for approximately 51 million individuals at a cost of about $604 billion. The deceptive nature of fraud makes its extent in the Medicare program difficult to measure in a reliable way, but it is clear that fraud contributes to Medicare's fiscal problems. More broadly, in fiscal year 2013, CMS estimated that improper payments—some of which may be fraudulent—were almost $50 billion.
This statement focuses on the progress made and important steps to be taken by CMS and its program integrity contractors to reduce fraud in Medicare. This statement is based on relevant GAO products and recommendations issued from 2004 through 2014 using a variety of methodologies. Additionally, in June 2014, GAO updated information based on new regulations regarding enrollment of certain providers in Medicare by examining public documents.
section_title: What GAO Found
paragraphs: The Centers for Medicare & Medicaid Services (CMS)—the agency within the Department of Health and Human Services (HHS) that oversees Medicare—has made progress in implementing several key strategies GAO identified or recommended in prior work as helpful in protecting Medicare from fraud; however, implementing other important actions that GAO recommended could help CMS and its program integrity contractors combat fraud. These strategies are:
Provider and Supplier Enrollment : The Patient Protection and Affordable Care Act (PPACA) authorized, and CMS has implemented, actions to strengthen provider and supplier enrollment that address past weaknesses identified by GAO and HHS's Office of Inspector General. For example, CMS has hired contractors to determine whether providers and suppliers have valid licenses and are at legitimate locations. CMS could further strengthen enrollment screening by issuing a rule to require additional provider and supplier disclosures of information, such as any suspension of payments from a federal health care program, and establishing core elements for provider and supplier compliance programs, as authorized by PPACA.
Prepayment and Postpayment Claims Review : Medicare uses prepayment review to deny claims that should not be paid and postpayment review to recover improperly paid claims. GAO has found that increased use of prepayment edits could help prevent improper Medicare payments. For example, prior GAO work identified millions of dollars of payments that appeared to be inconsistent with selected coverage and payment policies and therefore improper. Postpayment reviews are also critical to identifying and recouping overpayments. GAO recommended better oversight of both (1) the information systems analysts use to identify claims for postpayment review, in a 2011 report, and (2) the contractors responsible for these reviews, in a 2013 report. CMS has taken action or has actions under way to address these recommendations.
Addressing Identified Vulnerabilities : Having mechanisms in place to resolve vulnerabilities that could lead to improper payments is critical to effective program management and could help address fraud. However, prior GAO work has shown weaknesses in CMS's processes to address such vulnerabilities. For example, GAO has made multiple recommendations to CMS to remove Social Security numbers from beneficiaries' Medicare cards to help prevent identity theft. HHS agreed with these recommendations, but reported that CMS could not proceed with the changes for a variety of reasons, including funding limitations, and therefore has not taken action.
GAO work under way addressing these key strategies includes examining: (1) how well CMS's information system can prevent and detect the continued enrollment of ineligible or potentially fraudulent providers and suppliers in Medicare, (2) the potential use of electronic-card technologies to help reduce Medicare fraud, (3) CMS's oversight of program integrity efforts for prescription drugs, and (4) CMS's oversight of some of the contractors that conduct reviews of claims after payment. These studies could help CMS more systematically reduce potential fraud in the Medicare program.

section_title: Letter
paragraphs: I am pleased to be here today to discuss our work examining fraud in the  Medicare program. We have designated Medicare as a high-risk  program since 1990, in part because we found the program’s size and  complexity make it vulnerable to fraud, waste, and abuse. Although there  have been convictions for multimillion-dollar schemes that defrauded the  Medicare program, the extent of the problem is unknown. There are no  reliable estimates of the extent of fraud in the Medicare program or for the  health care industry as a whole. By its very nature, fraud is difficult to  detect, as those involved are engaged in intentional deception. For  example, a provider submitting a fraudulent claim may include false  documentation to substantiate a service not provided, and thus the claim  may appear valid on its face. Fraud may also involve payments made to  beneficiaries to obtain their Medicare number for fraudulent billing  purposes. Although the full extent of the problem is unknown, it is clear  that, as one of the largest programs in the federal government, the  Medicare program is vulnerable to fraud, contributing to its fiscal  problems.
In 2013, Medicare financed health care services for approximately   51 million individuals at a cost of about $604 billion and reported some of  the largest estimates of improper payments among federal programs— payments that either were made in an incorrect amount or should not  have been made at all. The Centers for Medicare & Medicaid Services  (CMS), the agency within the Department of Health and Human Services  (HHS) that oversees Medicare, has estimated that improper payments in  the Medicare program were almost $50 billion in fiscal year 2013, about  $5 billion higher than in 2012. Improper payments may be a result of  fraud, waste, or abuse, but it is important to distinguish that the $50 billion  in estimated improper payments reported by CMS in fiscal year 2013 is  not an estimate of fraud in Medicare. Reported improper payment  estimates include many types of payments that should not have been  made or were made in an incorrect amount such as overpayments,  underpayments, and payments that were not adequately documented.
Since its inception, Medicare has been administered largely by  contractors with federal oversight, and these contractors have a  responsibility to help ensure Medicare program integrity. CMS must oversee their efforts to help ensure proper payments and address the  program’s many vulnerabilities, which include service- or system-specific  weaknesses that can lead to payment errors, including those due to  fraud. If CMS suspects that providers or suppliers are billing fraudulently,  it can take action through its contractors, including suspending claims  payment, revoking billing privileges, or referring cases to law enforcement  for investigation.
My statement today focuses on the progress made and important steps to  be taken by CMS to reduce fraud in Medicare. It is primarily based on our  Medicare program integrity products issued and recommendations made  from April 2004 through May 2014, as well as selected updates on  actions CMS has taken, and will focus on progress related to three key  strategies we have identified as important to reducing fraud, waste, and  abuse, and ultimately improper payments:  strengthening provider and supplier enrollment standards and  procedures,  improving prepayment and postpayment review of claims, and addressing identified vulnerabilities.
In June 2014, we updated information based on new regulations  regarding enrollment of certain providers in Medicare by examining public  documents. Our work for this statement and the products on which it was  based was conducted in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: Since 1996, Congress has taken important steps to increase Medicare  program integrity funding and oversight, including the establishment of  the Medicare Integrity Program. Table 1 summarizes several key  congressional actions.
section_title: CMS Has Strengthened Provider and Supplier Screening, but More Can Be Done to Improve Medicare Program Integrity
paragraphs: CMS has made progress in strengthening provider and supplier  enrollment provisions, but needs to do more to identify and prevent  potentially fraudulent providers and suppliers from participating in  Medicare. Additional improvements to prepayment and postpayment  claims review would help prevent and recover improper payments.  Addressing payment vulnerabilities already identified could further help  prevent or reduce fraud.
subsections: section_title: CMS Has Strengthened Certain Enrollment Screening Procedures since PPACA
paragraphs: PPACA authorized and CMS has implemented new provider and supplier  enrollment procedures that address past weaknesses identified by GAO  and HHS’s Office of Inspector General (OIG) that allowed entities intent  on committing fraud to enroll in Medicare. CMS has also implemented  other measures intended to improve existing procedures. Specifically, to  strengthen the existing screening activities conducted by CMS  contractors, the agency added screenings of categories of provider and  supplier enrollment applications by risk level, contracted with new national  enrollment screening and site visit contractors, began imposing moratoria  on new enrollment of certain types of providers and suppliers, and issued  regulations requiring certain prescribers to enroll in Medicare.
subsections: section_title: Screening Provider and Supplier Enrollment Applications by Risk Level
paragraphs: CMS and OIG issued a final rule in February 2011 to implement many of  the new screening procedures required by PPACA. CMS designated  three levels of risk—high, moderate, and limited—with different screening  procedures for categories of Medicare providers and suppliers at each  level. Providers and suppliers in the high-risk level are subject to the most  rigorous screening. (See table 2.) Based in part on our work and that of  OIG, CMS designated newly enrolling home health agencies and  suppliers of durable medical equipment, prosthetics, orthotics, and  supplies (DMEPOS) as high risk, and designated other providers and  suppliers as lower risk levels. Providers and suppliers at all risk levels are  screened to verify that they meet specific requirements established by  Medicare, such as having current licenses or accreditation and valid  Social Security numbers. High- and moderate-risk providers and  suppliers are also subject to unannounced site visits. Further, depending  on the risks presented, PPACA authorizes CMS to require fingerprint- based criminal history checks. In March 2014, CMS awarded a contract  that is to enable the agency to access Federal Bureau of Investigation  information to help conduct those checks of high-risk providers and  suppliers. PPACA also authorizes the posting of surety bonds for certain  providers and suppliers.
CMS has indicated that the agency will continue to review the criteria for  its screening levels and will publish changes if the agency decides to  update the assignment of screening levels for categories of Medicare  providers and suppliers. Doing so could become important because the  Department of Justice (DOJ) and HHS reported multiple convictions,  judgments, settlements, or exclusions against types of providers and  suppliers not currently at the high-risk level, including community mental  health centers and ambulance suppliers. CMS’s implementation of  accreditation for DMEPOS suppliers, and of a competitive bidding  program, including in geographic areas thought to have high fraud rates,  may be helping to reduce the risk of DMEPOS fraud. While continued  vigilance of DMEPOS suppliers is warranted, other types of providers  may become more problematic in the future. Specifically, in September  2012 we reported that a range of providers have been the subjects of  fraud investigations. According to 2010 data from OIG and DOJ, over  10,000 providers and suppliers that serve Medicare, Medicaid, and  Children’s Health Insurance Program beneficiaries were involved in fraud  investigations, including not only home health agencies and DMEPOS   In addition,  suppliers but also physicians, hospitals, and pharmacies.the provider type constituting the largest percentage of subjects in  criminal health care fraud investigations was medical facilities—including  medical centers, clinics, or practices—which constituted almost a quarter  of subjects in such investigations. DMEPOS suppliers made up a little  over 16 percent of subjects.
We are currently examining the ability of CMS’s provider and supplier  enrollment system to prevent and detect the continued enrollment of  ineligible or potentially fraudulent providers and suppliers in Medicare.  Specifically, we are assessing the process used to enroll and verify the  eligibility of Medicare providers and suppliers in Medicare’s Provider  Enrollment, Chain, and Ownership System (PECOS) and the extent to  which CMS’s controls are designed to prevent and detect the continued  enrollment of potentially ineligible or fraudulent providers and suppliers in  PECOS. We plan to issue a report this winter.
section_title: Implementing National Enrollment Screening and Site Visit Contractors
paragraphs: CMS contracted with two new types of entities at the end of 2011 to  assume centralized responsibility for two functions that had been the  responsibility of multiple contractors. One of the new contractors is  conducting automated screenings to check that existing and newly  enrolling providers and suppliers have valid licensure, accreditation, and  a National Provider Identifier (NPI), and are not on the OIG list of  providers and suppliers excluded from participating in federal health care  programs. The second contractor conducts site visits of providers and  suppliers, except for DMEPOS suppliers, to determine whether sites are  legitimate and the providers and suppliers meet certain Medicare  standards. A CMS official reported that, since the implementation of the  PPACA screening requirements, the agency had revoked over 17,000 suspect providers’ and suppliers’ ability to bill the Medicare program.
section_title: Establishing Moratoria on Enrollment of New Providers and Suppliers in Certain Areas
paragraphs: CMS has suspended enrollment of new home health providers and  ground ambulance suppliers in certain fraud “hot spots” and other  geographic areas. In July 2013, CMS first exercised its authority granted  by PPACA to establish temporary moratoria on enrolling new home health  agencies in Chicago and Miami, and new ambulance suppliers in  Houston. In January 2014, CMS extended its first moratoria and added enrollment moratoria for new home health agency providers in Fort  Lauderdale, Detroit, Dallas, and Houston, and new ambulance suppliers  in Philadelphia. These moratoria are scheduled to be in effect until July  2014, unless CMS extends or lifts them. CMS officials cited areas of  potential fraud risk, such as a disproportionate number of providers and  suppliers relative to beneficiaries and extremely high utilization as  rationales for suspending new enrollments of home health providers or  ground ambulance suppliers in these areas.
section_title: Requiring Certain Prescribers to Enroll in Medicare
paragraphs: CMS recently issued a final rule requiring prescribers of drugs covered  within Medicare’s prescription drug program, Part D, to enroll in Medicare  by June 2015. As a result of this rule, CMS is to screen these  prescribers to verify that they meet specific requirements, such as having  current licenses or accreditation and valid Social Security numbers. OIG  has identified concerns with CMS oversight of fraud, waste, and abuse in   Part D, including the contractors tasked with this work. A June 2013 OIG  report found that the Part D program inappropriately paid for drugs  ordered by individuals who clearly did not have the authority to prescribe,  such as massage therapists, athletic trainers, home contractors, and   OIG recommended, among other things, that there should  interpreters.be verification of prescribers’ authority to prescribe drugs, and that CMS  should ensure that Medicare does not pay for prescriptions from  individuals without such authority. CMS agreed with OIG’s  recommendations and, in discussing the final rule, stated that this new  enrollment requirement is to help ensure that Part D drugs are prescribed  only by qualified physicians and eligible professionals. To continue to help  address potential vulnerabilities in the Part D program, we are currently  examining practices for promoting prescription drug program integrity and  the extent to which CMS’s oversight of Medicare Part D reflects those  practices. We plan to issue a report this fall.
section_title: Additional Enrollment Screening Could Help Ensure Potentially Fraudulent Providers and Suppliers Do Not Participate in Medicare
paragraphs: Although CMS has taken many needed actions, we and OIG have found  that CMS has not fully implemented other enrollment screening actions  authorized by PPACA. These actions could help further reduce the  enrollment of providers and suppliers intent on defrauding the Medicare  program, which is important because identifying and prosecuting  providers and suppliers engaged in potentially fraudulent activity is time  consuming, resource intensive, and costly. These actions include issuing  a rule to implement surety bonds for certain providers and suppliers,  issuing a rule on provider and supplier disclosure requirements, and  establishing the core elements for provider and supplier compliance  programs.
subsections: section_title: Surety Bonds
paragraphs: PPACA authorized CMS to require a surety bond for certain types of at- risk providers and suppliers. Surety bonds may serve as a source for  recoupment of erroneous payments. DMEPOS suppliers are currently  required to post a surety bond at the time of enrollment.  CMS reported  in April 2014 that it had not yet scheduled for publication a proposed rule  to implement the PPACA surety bond requirement for other types of at- risk providers and suppliers—such as home health agencies and  independent diagnostic testing facilities. In light of the moratoria that CMS  has placed on enrollment of home health agencies in fraud “hot spots,”  implementation of this rule could help the agency address potential  concerns for these at-risk providers across the Medicare program.
section_title: Providers and Suppliers Disclosure
paragraphs: 42 U.S.C. § 1395m(a)(16)(B). A DMEPOS surety bond is a bond issued by an entity  guaranteeing that a DMEPOS supplier will fulfill its obligation to Medicare. If the obligation  is not met, the surety bond is paid to Medicare. Medicare Program; Surety Bond  Requirement for Suppliers of Durable Medical Equipment, Prosthetics, Orthotics, and  Supplies (DMEPOS), 74 Fed. Reg. 166 (Jan. 2, 2009). suspension from a federal health care program.indicated that developing the additional disclosure requirements has been  complicated by provider and supplier concerns about what types of  information will be collected, what CMS will do with it, and how the  privacy and security of this information will be maintained.
section_title: Compliance Program
paragraphs: CMS has not established the core elements of compliance programs for  providers and suppliers, as required by PPACA. We previously reported  that agency officials indicated that they had sought public comments on  the core elements, which they were considering, and were also studying  criteria found in OIG model plans for possible inclusion.2014, CMS reported that it had not yet scheduled a proposed rule for  publication.
section_title: Further Improvements to Prepayment and Postpayment Claims Review May Better Identify or Recover Improper Payments
paragraphs: Medicare uses prepayment review to deny claims that should not be paid  and postpayment review to recover improperly paid claims. As claims go  through Medicare’s electronic claims payment systems, they are  subjected to prepayment controls called “edits,” most of which are fully  automated; if a claim does not meet the criteria of the edit, it is  automatically denied. Other prepayment edits are manual; they flag a  claim for individual review by trained staff who determine whether it  should be paid. Due to the volume of claims, CMS has reported that less  than 1 percent of Medicare claims are subject to manual medical record  review by trained personnel.
Increased use of prepayment edits could help prevent improper Medicare  payments. Our prior work found that, while use of prepayment edits saved  Medicare at least $1.76 billion in fiscal year 2010, the savings could have  been greater had prepayment edits been used more widely. Based on  an analysis of a limited number of national policies and local coverage  determinations (LCD), we identified $14.7 million in payments in fiscal  year 2010 that appeared to be inconsistent with four national policies and  therefore improper. We also found more than $100 million in payments  that were inconsistent with three selected LCDs that could have been  identified using automated edits. Thus, we concluded that more  widespread implementation of effective automated edits developed by  individual MACs in other MAC jurisdictions could also result in savings to  Medicare. CMS has taken steps to improve the development of other  types of prepayment edits that are implemented nationwide, as we  recommended. For example, the agency has centralized the development  and implementation of automated edits based on a type of national policy   CMS has also modified its  called national coverage determinations.processes for identifying provider billing of services that are medically  unlikely to prevent circumvention of automated edits designed to identify  an unusually large quantity of services provided to the same patient.
We also evaluated the implementation of CMS’s Fraud Prevention  System (FPS), which uses predictive analytic technologies as required by  the Small Business Jobs Act of 2010 to analyze Medicare fee-for-service  (FFS) claims on a prepayment basis. FPS identifies investigative leads for  CMS’s Zone Program Integrity Contractors (ZPIC), the contractors  responsible for detecting and investigating potential fraud. in July 2011, FPS is intended to help facilitate the agency’s shift from  focusing on recovering potentially fraudulent payments after they have  been made, to detecting aberrant billing patterns as quickly as possible,  with the goal of preventing these payments from being made. However, in  October 2012, we found that, while FPS generated leads for  investigators, it was not integrated with Medicare’s payment-processing  system to allow the prevention of payments until suspect claims can be  determined to be valid. As of April 2014, CMS reported that while the FPS  functionality to deny claims before payment had been integrated with the  Medicare payment processing system in October 2013, the system did  not have the ability to suspend payment until suspect claims could be  investigated. In addition, while CMS directed the ZPICs to prioritize alerts  generated by the system, in our work examining the sources of new ZPIC  investigations in 2012, we found that FPS accounted for about 5 percent  of ZPIC investigations in that year. A CMS official reported in March  2014 that ZPICs are now using FPS as a primary source of leads for  fraud investigations, though the official did not provide details on how  much of ZPICs’ work is initiated through the system.
GAO, Medicare Fraud Prevention: CMS Has Implemented a Predictive Analytics  System, but Needs to Define Measures to Determine Its Effectiveness, GAO-13-104  (Washington, D.C.: Oct. 15, 2012).
Our prior work found that postpayment reviews are critical to identifying  and recouping overpayments. The use of national recovery audit  contractors (RAC) in the Medicare program is helping to identify  underpayments and overpayments on a postpayment basis. CMS  began the program in March 2009 for Medicare FFS. CMS reported  that, as of the end of 2013, RACs collected $816 million for fiscal year  2014. PPACA required the expansion of Medicare RACs to Parts C and  D. CMS has implemented a RAC for Part D, and CMS said it plans to  award a contract for a Part C RAC by the end of 2014. Moreover, in  February 2014, CMS announced a “pause” in the RAC program as the  agency makes changes to the program and starts a new procurement  process for the next round of recovery audit contracts for Medicare FFS  claims. CMS stated it anticipates awarding all five of these new Medicare  FFS recovery audit contracts by the end of summer 2014.
Other contractors help CMS investigate potentially fraudulent FFS  payments, but CMS could improve its oversight of their work. CMS  contracts with ZPICs in specific geographic zones covering the nation. In  October 2013, we found that the ZPICs reported that their actions, such  as stopping payments on suspect claims, resulted in more than $250  million in savings to Medicare in calendar year 2012. However, CMS lacks information on the timeliness of ZPICs’ actions—such as the time it  takes between identifying a suspect provider and taking actions to stop  that provider from receiving potentially fraudulent Medicare payments— and would benefit from knowing whether ZPICs could save more money  by acting more quickly. Thus we recommended that CMS collect and  evaluate information on the timeliness of ZPICs’ investigative and  administrative actions. CMS did not provide comments on our  recommendation. We are currently examining the activities of the CMS  contractors, including ZPICs, that conduct postpayment claims reviews,  and anticipate issuing a report later this summer. Our work is reviewing,  among other things, whether CMS has a strategy for coordinating these  contractors’ postpayment claims review activities.
CMS has taken steps to improve use of two CMS information technology  systems that could help analysts identify fraud after claims have been  paid, but further action is needed. In 2011, we found that the Integrated  Data Repository (IDR)—a central data store of Medicare and other data  needed to help CMS program integrity staff and contractors detect  improper payments of claims—did not include all the data that were  planned to be incorporated by fiscal year 2010, because of technical  obstacles and delays in funding. As of March 2014, the agency had not  addressed our recommendation, to develop reliable schedules to  incorporate all types of IDR data, which could lead to additional delays in  making available all of the data that are needed to support enhanced  program integrity efforts and achieve the expected financial benefits.  However, One Program Integrity (One PI)—a web-based portal intended  to provide CMS staff and contractors with a single source of access to  data contained in IDR, as well as tools for analyzing those data—is  operational, and CMS has established plans and schedules for training all  intended One PI users, as we also recommended in 2011. However, as of  March 2014, CMS had not established deadlines for program integrity  contractors to begin using One PI, as we recommended in 2011. Without  these deadlines, program integrity contractors will not be required to use  the system, and as a result, CMS may fall short in its efforts to ensure the  widespread use and to measure the benefits of One PI for program  integrity purposes.
section_title: Addressing Identified Vulnerabilities Could Help Reduce Fraud
paragraphs: Having mechanisms in place to resolve vulnerabilities that could lead to  improper payments, some of which are potentially fraudulent, is critical to  effective program management, but our work has shown weaknesses in  CMS’s processes to address such vulnerabilities. Both we and OIG  have made recommendations to CMS to improve the tracking of  vulnerabilities. In our March 2010 report on the RAC demonstration  program, we found that CMS had not established an adequate process  during the demonstration or in planning for the national program to ensure  prompt resolution of vulnerabilities that could lead to improper payments  in Medicare; further, the majority of the most significant vulnerabilities  identified during the demonstration were not addressed. In December  2011, OIG found that CMS had not resolved or taken significant action to  resolve 48 of 62 vulnerabilities reported in 2009 by CMS contractors  specifically charged with addressing fraud. We and OIG recommended  that CMS have written procedures and time frames to ensure that  vulnerabilities were resolved. CMS has indicated that it is now tracking  vulnerabilities identified from several types of contractors through a single  vulnerability tracking process, and the agency has developed some  written guidance on the process. In 2012, we examined that process and  found that, while CMS informs Medicare administrative contractors (MAC)  about vulnerabilities that could be addressed through prepayment edits,  the agency does not systematically compile and disseminate information  about effective local edits to address such vulnerabilities. Specifically,  we recommended that CMS require MACs to share information about the  underlying policies and savings related to their most effective edits, and  CMS generally agreed to do so. In addition, in 2011 CMS began requiring  MACs to report on how they had addressed certain vulnerabilities to  improper payment, some of which could be addressed through edits.
We also made recommendations to CMS to address the millions of  Medicare cards that display beneficiaries’ Social Security numbers, which   In August 2012, we  increases beneficiaries’ vulnerability to identity theft.recommended that CMS (1) select an approach for removing Social  Security numbers from Medicare cards that best protects beneficiaries  from identity theft and minimizes burdens for providers, beneficiaries, and  CMS; and (2) develop an accurate, well-documented cost estimate for  such an option. In September 2013, we further recommended that CMS  (1) initiate an information technology project for identifying, developing,  and implementing changes for the removal of Social Security numbers;  and (2) incorporate such a project into other information technology  initiatives. HHS concurred with our recommendations and agreed that  removing the numbers from Medicare cards is an appropriate step toward  reducing the risk of identity theft. However, the department also stated  that CMS could not proceed with changes without agreement from other  agencies, such as the Social Security Administration, and that funding  was also a consideration. Thus, CMS has not yet taken action to address  these recommendations. We are currently examining other options for  updating and securing Medicare cards, including the potential use of  electronic-card technologies, and expect to issue a report early next year.
In conclusion, although CMS has taken some important steps to identify  and prevent fraud through increased provider and supplier screening and  other actions, the agency must continue to improve its efforts to reduce  fraud, waste, and abuse in the Medicare program. Identifying the nature,  extent, and underlying causes of improper payments, and developing  adequate corrective action processes to address vulnerabilities, are  essential prerequisites to reducing them. As CMS continues its  implementation of PPACA and Small Business Jobs Act provisions,  additional evaluation and oversight will help determine whether  implementation of these provisions has been effective in reducing  improper payments. We are investing resources in a body of work that  assesses CMS’s efforts to refine and improve its fraud detection and  prevention abilities. Notably, we are currently assessing potential use of  electronic-card technologies, which can help reduce Medicare fraud. We  are also examining the extent to which CMS’s information system can  help prevent and detect the continued enrollment of ineligible or  potentially fraudulent providers and suppliers in Medicare. Additionally,  we have a study under way examining CMS’s oversight of fraud, waste,  and abuse in Medicare Part D to determine whether the agency has  adopted certain practices for ensuring the integrity of that program. We  are also examining CMS’s oversight of some of the contractors that  conduct reviews of claims after payment. These studies are focused on  additional actions for CMS that could help the agency more systematically  reduce potential fraud in the Medicare program.
Chairman Murphy, Ranking Member DeGette, and Members of the  Subcommittee, this concludes my prepared remarks. I would be pleased  to respond to any questions you may have at this time.
section_title: GAO Contact and Staff Acknowledgments
paragraphs: For further information about this statement, please contact   Kathleen M. King at (202) 512-7114 or kingk@gao.gov. Contact points   for our Offices of Congressional Relations and Public Affairs may be  found on the last page of this statement. Karen Doran, Assistant Director;  Eden Savino; and Jennifer Whitworth were key contributors to this  statement.
section_title: Appendix I: Abbreviations
section_title: Related GAO Products
paragraphs: Medicare: Further Action Could Improve Improper Payment Prevention  and Recoupment Efforts. GAO-14-619T. Washington, D.C.: May 20,  2014.
Medicare Fraud: Progress Made, but More Action Needed to Address  Medicare Fraud, Waste, and Abuse, GAO-14-560T. Washington, D.C.:  April 30, 2014.
Medicare: Second Year Update for CMS’s Durable Medical Equipment  Competitive Bidding Program Round 1 Rebid. GAO-14-156. Washington,  D.C.: March 7, 2014.
Medicare Program Integrity: Contractors Reported Generating Savings,  but CMS Could Improve Its Oversight. GAO-14-111. Washington, D.C.:  October 25, 2013.
Health Care Fraud and Abuse Control Program: Indicators Provide  Information on Program Accomplishments, but Assessing Program  Effectiveness Is Difficult. GAO-13-746. Washington, D.C.: September 30,  2013.
Medicare Information Technology: Centers for Medicare and Medicaid  Services Needs to Pursue a Solution for Removing Social Security  Numbers from Cards. GAO-13-761. Washington, D.C.: September 10,  2013  Medicare Program Integrity: Few Payments in 2011 Exceeded Limits  under One Kind of Prepayment Control, but Reassessing Limits Could Be  Helpful. GAO-13-430. Washington, D.C.: May 9, 2013.
High-Risk Series: An Update. GAO-13-283. Washington, D.C.:   February 14, 2013.
Medicare Program Integrity: Greater Prepayment Control Efforts Could  Increase Savings and Better Ensure Proper Payment. GAO-13-102.  Washington, D.C.: November 13, 2012.
Medicare Fraud Prevention: CMS Has Implemented a Predictive  Analytics System, but Needs to Define Measures to Determine Its  Effectiveness. GAO-13-104. Washington, D.C.: October 15, 2012.
Health Care Fraud: Types of Providers Involved in Medicare, Medicaid,  and the Children’s Health Insurance Program Cases. GAO-12-820.  Washington, D.C.: September 7, 2012.
Medicare: CMS Needs an Approach and a Reliable Cost Estimate for  Removing Social Security Numbers from Medicare Cards. GAO-12-831.  Washington, D.C.: August 1, 2012.
Program Integrity: Further Action Needed to Address Vulnerabilities in  Medicaid and Medicare Programs. GAO-12-803T. Washington, D.C.:  June 7, 2012.
Medicare: Review of the First Year of CMS’s Durable Medical Equipment  Competitive Bidding Program’s Round 1 Rebid. GAO-12-693.  Washington, D.C.: May 9, 2012.
Medicare Program Integrity: CMS Continues Efforts to Strengthen the  Screening of Providers and Suppliers. GAO-12-351. Washington, D.C.:  April 10, 2012.
Medicare Part D: Instances of Questionable Access to Prescription  Drugs. GAO-11-699. Washington, D.C.: September 6, 2011.
Medicare Integrity Program: CMS Used Increased Funding for New  Activities but Could Improve Measurement of Program Effectiveness.  GAO-11-592. Washington, D.C.: July 29, 2011.
Fraud Detection Systems: Centers for Medicare and Medicaid Services  Needs to Ensure More Widespread Use. GAO-11-475. Washington, D.C.:  June 30, 2011.
Medicare Fraud, Waste, and Abuse: Challenges and Strategies for  Preventing Improper Payments. GAO-10-844T. Washington, D.C.:   June 15, 2010.
Medicare Recovery Audit Contracting: Weaknesses Remain in  Addressing Vulnerabilities to Improper Payments, Although  Improvements Made to Contractor Oversight. GAO-10-143. Washington,  D.C.: March 31, 2010.
Medicare: Thousands of Medicare Providers Abuse the Federal Tax  System. GAO-08-618. Washington, D.C.: June 13, 2008.
Medicare: Improvements Needed to Address Improper Payments for  Medical Equipment and Supplies. GAO-07-59. Washington, D.C.:  January 31, 2007.
Medicare: More Effective Screening and Stronger Enrollment Standards  Needed for Medical Equipment Suppliers. GAO-05-656. Washington,  D.C.: September 22, 2005.
Medicare: CMS’s Program Safeguards Did Not Deter Growth in Spending  for Power Wheelchairs. GAO-05-43. Washington, D.C.: November 17,  2004.
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