CMS Made Payments Associated With Providers After Referring Individual Providers' Debts to the Department of the Treasury for Collection

CMS made Medicare and Medicaid payments associated with 23 of 82 individual physicians with delinquent debts after CMS had referred their Medicare debts to the U.S. Department of the Treasury (Treasury) for collection. Specifically, CMS directly paid 5 individual physicians after having referred their Medicare debts to Treasury, and 21 individual physicians provided services for an entity that received Federal reimbursement. The 23 individual physicians, who collectively owed CMS a total of $8.84 million ($8 million owed by 21 individual physicians that performed services for entities and $42,000 owed by 2 individual physicians that received only direct payments), were paid a total of $10.7 million ($317,000 in direct payments to 5 individual physicians and $10.4 million in payments to entities for services performed by the 21 individual physicians).

In addition, 13 of the 23 individual physicians whose debts were referred to Treasury had ownership interest and/or managing control of 15 Medicare Part B entities that received Medicare reimbursement from CMS after CMS referred the individual physicians' debts to Treasury. Although these individual physicians are not precluded from indirectly receiving Medicare Part B payments through an entity, CMS published a proposed rule in April 2013 that, if finalized, may deny an entity's enrollment due to Medicare debt owed by an owner.

CMS made payments associated with individual physicians after referring their Medicare debts to Treasury because (1) individual physicians' debts were associated with their individual provider numbers, not the provider numbers associated with the entities under which they performed services, and (2) entities for which individual physicians with delinquent debts have an ownership interest and/or managing control are currently not always precluded from enrolling in Medicare.

We recommended that CMS (1) ensure that it does not pay individual physicians with delinquent debts after referring their Medicare debts to Treasury for collection, which could have resulted in savings to the Federal Government of $317,000; (2) consider authorizing Treasury to use its administrative wage garnishment authority to collect delinquent debts, totaling $8.8 million, associated with 21 individual physicians; (3) consider the results of our review when developing and evaluating policies that prevent payments to entities claiming reimbursement for services provided by individual physicians who have delinquent debts, which could have resulted in savings to the Federal Government of $10.4 million; and (4) consider promulgating Federal regulations to prevent entities for which individual physicians with delinquent debts that have any ownership interest and/or managing control from enrolling in Medicare. CMS concurred with our recommendations and described the actions it has taken and plans to take to implement them.