Oversight and Evaluations of the Fiscal Year 2006 Hospital Payment Monitoring Program

EXECUTIVE SUMMARY:

The objectives of our fiscal year (FY) 2006 Hospital Payment Monitoring Program (HPMP) audit were to determine: (1) whether CMS ensured that the clinical data abstraction contactor (CDAC) and the quality improvement organizations (QIOs) had appropriate controls to ensure that sampling procedures, admission-necessity and diagnosis-related group (DRG) validation screenings, and quality control reviews followed established procedures and operated effectively; (2) the status of initiatives to reduce the HPMP error rate that CMS identified in its November 2005 “Improper Fee-For-Service Payments Long Report;” and (3) whether CMS took appropriate action on the recommendations made in our FY 2005 audit report. 

CMS ensured that the CDAC and the QIOs had appropriate controls to ensure that sampling procedures, admission-necessity and DRG validation screenings, and quality control reviews followed established procedures and operated effectively. In addition, CMS advised us that it had performed several tasks to accomplish its initiatives to reduce the HPMP error rate. Finally, CMS and its HPMP contractors took appropriate action on the recommendations made in our FY 2005 audit report.