Editor’s Note: For more information about the HHS Inspector General report and its implications for comptitive bidding, please see CRE’s Competitive Bidding blog here.

From: Becker’s Hospital Review

Written by Molly Gamble

A new report from the Office of Inspector General has found weaknesses in the conflict-of-interest reporting program for companies that submit proposals for Medicare Zone Program Integrity Contractors and subcontractors.

CMS uses ZPICs to perform integrity activities to prevent fraud, waste and abuse in Medicare. This fraud-fighting ZPIC program performs the majority of integrity work for CMS, making potential conflicts of interest especially risky to the program’s objectivity. CMS hires contractors to conduct daily ZPIC operations, and those contractors can refer suspected cases of fraud to the OIG.

The OIG reviewed conflict-of-interest information for 18 offerors, or the companies that submitted proposals for ZPICs, and 85 subcontractors. It also conducted interviews with CMS staff to review the agency’s conflict-of-interest reporting program.

The OIG found offerors and subcontractors “often had business and contractual relationships” with CMS and other offerors but rarely considered them to be actual conflicts. Offerors, subcontractors and CMS identified 1,919 relationships as “possible conflicts” but only 16 as actual conflicts.

For instance, one offeror’s parent company also owned a Medicare Administrative Contractor that processed Medicare claims in the same zone. In another case, an offeror had a board member whose spouse was a vice president for a provider in the same zone the ZPIC would review claims. Both of these instances were considered “possible” conflicts of interest.

Furthermore, the OIG found CMS does not have a written policy for reviewing conflict and financial interest information submitted by offerors. The submitted information was not always consistent or complete. Two offerors and 32 subcontractors did not report any information on their financial interests in other entities, while seven offerors and 32 subcontractors did not provide all the required information in their Request for Proposal.

CMS has concurred with the OIG’s recommendation to develop a formal, written policy to review conflict-of-interest information. CMS also said it “considers it a success that the offerors disclosed as many [organizational conflict-of-interest] issues as they did,” but it agreed with the OIG’s recommendation to provide clearer guidance in RFP documents on what contractual relationships are “possible” or “actual” conflicts.