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Highlights

In September 2002, the Centers for Medicare and Medicaid Services (CMS) awarded the RAND Corporation, with the University of Wisconsin's Center for Health Systems Research and Analysis as a subcontractor, a task order to study inconsistency in the nursing home survey process. Allegations were made that CMS directed RAND not to retain the Center as a subcontractor in retaliation for technical concerns that the Center's Director had raised about another CMS initiative. GAO was asked to examine these allegations. Specifically, GAO was asked to examine CMS's selection of RAND for this task order, the basis for CMS's decision to exclude the Center as a subcontractor, and whether the Center's exclusion extended to other CMS contracts.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Health and Human Services 1. In order to maintain the integrity of the Centers for Medicare and Medicaid Services procurement process, the Secretary of Health and Human Services should take appropriate action to remedy the Administrator's improper decision to exclude the Center from the RAND task order. Such a remedy could include permitting RAND to subcontract with the Center as RAND had proposed or reopening the competition for the award of the nursing home survey research task order.
Closed - Implemented
CMS reopened competition for the award of the nursing home survey research work on July 29, 2003, and awarded a contract to perform this work to Abt Associates, Inc. on September 30, 2003.
Department of Health and Human Services 2. In order to maintain the integrity of the Centers for Medicare and Medicaid Services (CMS) procurement process, the Secretary of Health and Human Services should have CMS procurement decisions affecting the Center since September 2002 reviewed to ensure that they were supported by a reasonable basis.
Closed - Implemented
In September 2003, HHS completed a formal Procurement Management Assessment Review (PMAR) of CMS's treatment of the Center regarding procurement decisions since September 2002. HHS provided GAO with a copy of this report on October 16, 2003. The PMAR report includes recommendations to strengthen internal controls and to ensure that future CMS contracting actions are in compliance with the acquisition regulations.

Full Report