CMS Saves Money by Not Obeying Law

A new report by HHS’ Office of Inspector General found that CMS has not been reporting many adverse actions taken against health care providers to a central database as requried by law.  As the report explains, “Section 1128E of the Social Security Act and the implementing regulations require the reporting of a variety of adverse actions to the” Healthcare Integrity and Protection Data Bank (HIPDB) which was established in 1997.  Federal and State government agencies and health plans are required to report adverse actions taken against health care providers including DME suppliers, laboratories, and nursing homes.

The HIPDB is not a mere paperwork exercise, instead as OIG explains, the database “plays an important role in preventing the employment of potentially fraudulent or abusive providers, so it is important that the information it contains be complete and accurate.”

With respect to DME providers, the OIG found:

• “None of the adverse actions against durable medical equipment (DME) suppliers taken after 2008 had been reported to the HIPDB. …  According to the officials with whom we spoke, as a cost-saving measure, CMS is no longer reporting adverse actions taken against DME suppliers to the HIPDB.”  [Emphasis added]

The report also stated that “CMS officials believe that only adverse actions related to fraud and abuse should be reported to the HIPDB”  even though, as OIG notes, “the Social Security Act does not limit the reporting of adverse actions to cases of fraud and abuse.”

CMS concurred with OIG’s recommendation for ensuring that all adverse actions are reported as required.

It is ironic that at a time while CMS has been imposing substantial economic hardship on DME providers to combat fraud, the agency has largely shirked a statutorily-required component of its own anti-fraud responsibilities to save itself money.