Federal Manager's Daily Report

The Medicare program has announced a series of strategies it will undertake on improper payments, including dropping what it called the “pay and chase” approach.

Medicare has long been identified as one of the agencies where concerns about improper payments—which the government defines not just as overpayments but also as underpayments and correct payments insufficiently documented—with GAO including it on its high-risk list. In 2018, an estimated 5 percent of the program’s more than $600 billion in costs was deemed improper.


“While CMS regularly implements GAO recommendations, sometimes we lack the tools or capabilities to integrate worthy suggestions,” the agency said in a blog post, citing as an example provisions in law that limit its ability to go after fraud and waste in its fee for service program. Also, the growing complexity of programs such as Medicare Advantage have brought “new challenges in identifying improper payments, beneficiary safety and quality issues, and other program integrity concerns.”

It said that Medicare’s is developing a strategy including: enhanced coordination with IGs, the Justice Department and others to investigate and prosecute providers who commit fraud; replacing “pay and chase” with “infrastructure that prevents fraud, waste and abuse on the front end” and keeping “unscrupulous providers and suppliers out of Medicare and Medicaid from the outset”; increasing prior authorization requirements for items such as orthotics and prosthetics which have been the target of recent telemarketing fraud schemes; and testing new approaches for high vulnerability services such as home health care.

Medicare meanwhile has issued several requests for information on program integrity issues and on possible new techniques and approaches using advanced data analytics and artificial intelligence.