Health Reform WK-EDGE HHS not fully compliant with requirements of the Improper Payments Information Act for FY 2019
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Tuesday, May 26, 2020

HHS not fully compliant with requirements of the Improper Payments Information Act for FY 2019

By Todd Fanter, J.D.

The Office of Inspector General found that for 2019, HHS met many, but not all, of the requirements of the Improper Payments Information Act of 2002.

The HHS Office of Inspector General (OIG) conducted a performance audit of HHS’ compliance with the required calculation and disclosure of improper payment rates for the fiscal year that ended September 30, 2019. This audit was intended to determine if HHS was in compliance with the Improper Payments Information Act (IPIA) of 2002, amended by the Improper Payments Elimination and Recovery Act (IPERA) of 2010 and the Improper Payments Elimination and Recovery Improvement Act (IPERIA) of 2012. The OIG found that while HHS met many requirements, HHS did not fully comply with IPIA for 2019 (OIG Report, No. A-17-20-52000, May 8, 2020).

Audit. As part of the audit, the OIG evaluated eight programs that the Office of Management and Budget (OMB) deemed susceptible to significant improper payments against IPIA criteria. These programs were Medicare Fee-for-Service (FFS), Medicare Advantage (Part C), Medicare Prescription Drug Benefit (Part D), Medicaid, Temporary Assistance for Needy Families (TANF), Foster Care, Child Care and Development Fund (CCDF) and Children’s Health Insurance Program (CHIP).

Internal control within the context of the audit objectives is significant and HHS evaluated the control environment to determine whether HHS maintained adequate internal control over the improper payment process for the OMB designated high-priority programs: Medicare FFS, Medicare Advantage, Medicaid and CHIP.

Results. OIG concluded that HHS met many of the IPIA requirements but did not fully comply with IPIA for the fiscal year 2019. Specifically, HHS is not in full compliance with Section 6411 of the Patient Protection and Affordable Care Act (ACA), as HHS has not yet implemented recovery activities of the identified improper payments for the Medicare Advantage program in 2019, as required by IPIA and Soc. Sec. Act §189 (h). Medicaid and CHIP improper payment rates percentages exceeded 10 percent for 2019. There was no Recovery Audit Contract activity completed during 2019 to recover improper payments for Medicare Advantage. An improper payment estimate and corrective action plan (CAP) was not published for TANF. As a result, HHS was unable to publish a reduction target for future improper payment levels and fulfill the criteria of achieving improper payment rate of less than 10 percent per OMB guidance.

The OIG reviewed prior-year reports issued by the OIG and identified previous instances of non-compliance with IPIA in the Medicaid, CHIP, TANF and Medicare Advantage (Part C) programs. HHS has been non-compliant for five or more consecutive years for these programs.

Recommendations. For the TANF program, the OIG recommended the ACF develop an improper payment estimate and CAP. For the Medicare Part C Program, HHS should continue to explore alternate vehicles to conduct recovery audits that will fit into the larger Medicare Part C program in 2020. Additionally, the OIG recommended that HHS analyze the viability of issuing a contract that is cost-beneficial to the program. Lastly, for Medicaid and CHIP, HHS should focus on identifying root causes for the improper payment percentage and evaluate critical and feasible actions steps to reduce the improper payment percentages below 10 percent.

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