Effective oversight of community mental health centers (CMHCs) is lacking, and Medicare might be wasting taxpayer money as a result, the OIG said in a recent report. A review of nine Medicare contractors tasked with ensuring proper payments are made to CMHCs found that eight did not engage in any anti-fraud activities in 2010, such as conducting site visits or following-up on complaints. The eight Medicare Administrative Contractors paid CMHCs $61 million for partial hospitalization programs, which are considered especially prone to fraud, waste, and abuse.

The OIG also examined the role of Zone Program Integrity Contractors, who are responsible for investigating potential fraud, and found their performance to be lacking as well. A review of three ZPICs found that 78 percent (50 out of 55) of all CMHCs investigations in 2010 were performed by one ZPIC. "In contrast, the other two ZPICs in our review, which include the fraud-prone areas of Baton Rouge and Houston, performed far fewer activities to deter fraudulent CMHC billing in 2010," the OIG said. The OIG recommended that CMS implement more extensive anti-fraud programs for CMHCs.