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The government's Centers for Medicare and Medicaid Services paid $735.4 million to more than 250 different contractors and vendors. Most of the money went to 16 major contractors. The drug benefit kicked in on Jan. 1, 2006.
The contractors helped with marketing and with oversight of the 1-800-Medicare help line. They also provided technical expertise. The questionable payments represent about $1 out every $7 spent.
Auditors said they found payments that did not comply with the terms of contracts. For example, the agency paid more than the contract's ceiling amount and for travel costs that exceeded allowable limits. In other cases, it could not obtain adequate documentation to support costs billed, such as invoices or time sheets. In one case, the agency was billed twice for $95,000 worth of equipment.
The auditors said that Medicare's contracting has more than doubled over the past decade. Yet, the number of full-time employees providing contract oversight went up 11 percent during that time.
"This trend presents a major challenge," said the Government Accountability Office.
Not only are staff overwhelmed by the workload, they are insufficiently trained, auditors said. In addition, the procedures that Medicare uses to review billing statements contains "pervasive" deficiencies, such as the failure to perform timely closeouts of contracts. Some staff told auditors they relied on an agency handbook to spell out their responsibilities for reviewing bills.
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 "We reviewed this handbook and found that it did not provide any practical guidance on how to review invoices," the auditor said.
Members of the Senate Finance Committee requested the audit. "The questionable payments and lack of accountability described in this report are alarming and intolerable," said the committee's chairman, Sen. Max Baucus, D-Mont.
Medicare spokesman Jeff Nelligan said the sheer scope and rapid enactment of the drug benefit required the agency to use contracting methods that are not part of the agency's current procedures.
"We also disagree with GAO's conclusion that $90 million in questionable payments were made to contractors. That's not true," Nelligan said. "The process is not over because we have not audited the contracts in question nor have we finally determined the amount of payments owed to the contractors."
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On the Net:
Government Accountability Office: http://www.gao.gov/
[Associated
Press; By KEVIN FREKING]
Copyright 2007 The Associated
Press. All rights reserved. This material may not be published,
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