Medicare Secondary Payer: Improvements Needed to Enhance Debt Recovery Process

GAO-04-783 Published: Aug 20, 2004. Publicly Released: Sep 20, 2004.
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Highlights

Last year, employer-sponsored group health plans (EGHP) were responsible for most of the nearly $183 million in outstanding Medicare secondary payer (MSP) debt. MSP debts arise when Medicare inadvertently pays for services that are subsequently determined to be the financial responsibility of another. The Centers for Medicare & Medicaid Services (CMS) administers Medicare with the assistance of about 50 contractors that, as part of their duties, are required to recover MSP debt. GAO was asked to determine whether Medicare contractors are appropriately recovering MSP debt. GAO (1) assessed the cost-effectiveness of the current debt recovery system and (2) identified CMS's plans to enhance the recovery process. GAO analyzed workload and budget information and assessed plans to develop a new debt recovery system--the Recovery Management and Accounting System (ReMAS).

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Centers for Medicare & Medicaid Services The administrator of CMS should develop detailed plans and time frames for expanding ReMAS to include EGHP cases, and expedite implementation of the EGHP component of ReMAS.
Closed – Implemented
In July 2007, CMS reported that the employer-sponsored group health plans (EGHP)and non-EGHP functionally within the Recovery Management and Accounting System (ReMAS)has been implemented. On October 1, 2006, CMS awarded a contract to process all Medicare Secondary Payer(MSP)EGHP and non-EGHP recoveries. The MSP Recovery Contractor (MSPRC), Chickasaw Nation Industries, Inc. Administration Services, LLC (CNI), will consolidate all post-payment MSP services previously administered by over 40 individual Medicare intermediary and carrier contractors. The MSPRC became fully operational on October 2, 2006.
Centers for Medicare & Medicaid Services The administrator of CMS should improve the efficiency of MSP payment recovery activities by consolidating the EGHP workload under a smaller number of contractors and ensuring that contractor budgets for EGHP recovery activities more closely reflect their actual workloads.
Closed – Implemented
In July 2007, CMS reported that it awarded a $44.6 Million cost-plus-award-fee contract for Medicare Secondary Payer Recovery Contractor (MSPRC) services to Chickasaw Nation Industries, Inc. Administration Services, LLC (CNI). The MSPRC will consolidate all post-payment Medicare Secondary Payer (MSP) services previously administered by over 40 individual Medicare intermediary and carrier contractors. The MSPRC contract became fully operational on October 2, 2006.

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