Oversight and Evaluation of the Fiscal Year 2004 Comprehensive Error Rate Testing Program

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EXECUTIVE SUMMARY:

The Centers for Medicare and Medicaid Services (CMS) developed the Comprehensive Error Rate Testing (CERT) program primarily to establish the Medicare fee-for-service paid claims error rate for all types of Medicare services other than inpatient acute care hospital services.  The objectives of this review were to determine whether (1) the CERT contractor had appropriate controls to ensure that medical reviews were performed in accordance with established procedures and that the results of those reviews were adequately maintained, updated, and reported and (2) the CERT quality assurance program ensured the reliability of the claims review process.  The CERT contractor generally had appropriate controls to ensure that medical reviews were performed in accordance with established procedures and that the results of those reviews were adequately maintained, updated, and reported.  Despite the lack of timeliness, the CERT contractor identified problems, took corrective action, and completed the review and the Medicare error rate calculations by the required due date.

However, the quality assurance program did not provide full assurance of the reliability of the claims review process.  The CERT contractor completed only 984 of the required 2,587 FY 2004 quality assurance reviews by July 30, 2004.  Personnel from CERT stated that because of an overwhelming backlog of initial medical record reviews, management reallocated resources to complete those reviews and delayed the completion of the required quality assurance reviews.  We recommended that CMS direct the CERT contractor to schedule and complete the required number of quality assurance reviews throughout the year.  In informal comments on a draft of this report, CMS officials agreed with the audit results and the recommendation.