Department of Health and Human Services

Office of Inspector General -- AUDIT

"Delinquent Medicare Debt and Compliance With the Debt Collection Improvement Act by the Centers for Medicare and Medicaid Services," (A-17-01-02003)

March 12, 2002

Complete Text of Report is available in PDF format (2.37 mb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This final report points out that in recent years the Centers for Medicare & Medicaid Services (CMS) has made significant progress managing debt, especially at the Medicare contractors. However, serious problems remain. We identified an estimated $670 million (absolute value) in misstated and misclassified delinquent Medicare debt in information reported to the Treasury Department. Misstatements included $450 million in reconciliation errors, $68 million in unsupported or unrecorded transactions, and $152 million in classification errors regarding the debts eligibility for referral to Treasury for collection. Further, the CMS did not have an adequate process for pursing debt through the issuance of required demand letters. We made specific recommendations for improving supporting documentation, periodic reconciliations, and supervisory review of delinquent debt activities. The CMS concurred with our recommendations.