The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) released a report on July 9 that examined conflicts and financial relationships among potential Zone Program Integrity Contractors (ZPICs) and their subcontractors. The Centers for Medicare & Medicaid Services (CMS) uses ZPICs to perform program integrity activities, designed to fight fraud, waste, and abuse, in Medicare Parts A and B. Conflicts of interest among ZPICS could compromise CMS’ efforts to protect the program, according to the report.
CMS requires companies that submit proposals for ZPIC contracts (offerors) and their subcontractors to disclose information about any business or contractual relationships that may present conflicts and provide a strategy to mitigate all conflicts of interest that may compromise the ZPICs’ impartiality in conducting their work.
The OIG found that offerors and their subcontractors often had business and contractual relationships with CMS and with other offerors, but the offerors rarely considered them to be actual conflicts. Offerors reported having relationships with CMS or CMS contractors that provide Medicare Parts C and D plans, claims processing, program integrity, and/or quality improvement services. According to the study, of the 1,935 reported conflicts, offerors, subcontractors, and CMS identified 16 actual conflicts, all of which CMS considered to be mitigated. In addition, some offerors and subcontractors failed to provide all the requisite information regarding financial interests in other entitiess that would cause a conflict of interest with CMS.
CMS does not have a written policy for reviewing conflict and financial interest information submitted by offerors, and submitted information was not always consistent or complete.
The OIG recommended that CMS take the following initiatives to encourage an environment of transparency and accountability among contractors:
- Provide clearer guidance in the Request for Proposals (RFP) to offerors and subcontractors regarding which business and contractual relationships should be identified as actual conflicts and which should be identified as possible conflicts.
- Require offerors and subcontractors to distinguish those business and contractual relationships that they deem to be actual conflicts from those they deem to be possible conflicts.
- State whether offerors and subcontractors need to report income amounts, performance periods, and types of work performed for their contracts with CMS and income amounts generated from key personnel’s other employment.
- Create a standardized format for reporting information in the Organizational Conflict of Interest Certificate and require its use by offerors and subcontractors.
- Develop a formal, written policy outlining how conflict-of-interest information provided by offerors should be reviewed by CMS staff.
CMS partially concurred with the first and second recommendations and fully concurred with the remaining recommendations.
To view the whole report, including CMS’ responses to the recommendations, visit the HHS OIG website.
