Required Audits of Limited Value
The Centers for Medicare and Medicaid Services did not meet the audit requirement for private insurers participating in Medicare for the contract years 2001–2005, nor did it attempt to recover overpayments to the insurers that should have been channeled back to the beneficiaries and government, according a report by the Government Accountability Office. The Balanced Budget Act of 1997 required the CMS to conduct annual audits of at least one-third of the participating insurers. During 2001–2005, between 19% and 23% of organizations were audited, and only 14% were audited in 2006. In 2003, 49 of 220 participating plans were audited; a contractor identified errors for 41 of those, which would have translated into $59 million that could have covered additional benefits or offset costs for beneficiaries. The CMS claimed that it does not have legal authority to pursue such financial recoveries, but the GAO asserted that the CMS has the authority but did not exercise it.
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