OIG: More Than 4 Million Medicare Summary Notices Returned as Undeliverable in 2012

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By James Swann  

Jan. 24 --More than 4 million Medicare Summary Notices (MSNs) sent out by Medicare claims processors in 2012 were returned due to being undeliverable, which might hinder efforts to use beneficiaries to root out potential fraud and abuse, according to a report from the Department of Health and Human Services Office of Inspector General released Jan. 24.

The report, “Over Four Million Medicare Summary Notices Mailed to Beneficiaries Were Not Delivered in 2012” (OEI-03-12-00600), said Medicare Administrative Contractors (MACs) mailed 194 million MSNs to beneficiaries in 2012, out of which roughly 4.2 million were returned as undeliverable.

This means “CMS is missing the opportunity to solicit these beneficiaries' help in the fight against fraud,” the report said.

MSNs are generally sent to Medicare beneficiaries on a quarterly basis and provide information on claims that have been processed for the beneficiary. They “serve as a fraud detection tool that beneficiaries can use to ensure that Medicare is paying for services or items that were actually provided to them,” the OIG said.

The OIG examined a sample of 1,445 undelivered MSNs and found that 51 of them included paid Medicare claims that were related to compromised beneficiary or provider Medicare numbers. The total amount of paid claims associated with the 51 MSNs was $166,000, and the total amount of paid claims for all 1,445 undeliverable MSNs was $2.7 million.

MACs couldn't provide the total paid claims amounts for all 4.2 million undeliverable MSNs, the report said.

The OIG said the number of undeliverable MSNs might be even higher than 4.2 million, “as 1 of the 19 claims processors did not report the number of undelivered MSNs and 7 claims processors provided data that did not cover the full calendar year.”

Additionally, two of the 19 claims processors reported the number of undeliverable MSN envelopes they received, not the actual number of undeliverable MSNs. Each MSN envelope may contain more than one MSN, according to the OIG.

The Centers for Medicare & Medicaid Services' Medicare Claims Processing Manual doesn't include instructions on how MACs should track and follow up undelivered MSNs.

Limited Tracking Procedures

Although the OIG found that 16 out of the 19 claims processors performed some tracking of undeliverable MSNs, the tracking and follow-up procedures were inconsistent.

For example, 12 of the 19 claims processors tracked the number of undeliverable MSNs, and six collected information on undeliverable MSNs, such as the beneficiary name and number.

Part of the reason for the inconsistency is that the CMS hasn't provided guidance on tracking or follow-up procedures for undeliverable MSNs.

Additionally, the OIG said follow-up procedures for undeliverable MSNs were lacking.

Ten of the 19 claims processors have written procedures related to finding new addresses for undeliverable MSNs, but only five of the 10 verified addresses for all their undeliverable MSNs in 2012.

Even when claims processors do find new beneficiary addresses, they can only tell beneficiaries to contact the Social Security Administration (SSA) to change their address.

A wrong address was the most common reason for undeliverable MSNs, the report said. Other reasons for an MSN being returned included a beneficiary being away from home, the expiration of a forwarding order and a lack of postage.

Within the 1,445 sample of undeliverable MSNs, no address changes were made to 71 percent (1,033) within three months of the receiving the returned MSN.

OIG Recommendations

The OIG recommended that the CMS provide claims processors with guidance on how to handle undeliverable MSNs.

Specifically, the guidance should include information on:

• whether to destroy or store undeliverable MSNs;

• how to track undeliverable MSNs;

• how to keep information on undeliverable MSNs;

• how to verify beneficiary addresses for MSNs;

• how to encourage beneficiaries to contact the SSA to change their addresses;

• how to analyze undeliverable MSNs to determine if there are any patterns of fraud and abuse; and

• how to refer information on undeliverable MSNs to program integrity contractors.

 

The OIG also said the CMS should make sure claims processors have access to complete beneficiary address data maintained by the SSA.

The CMS agreed with both recommendations and said it would begin working with claims processors to create procedures for handling undeliverable MSNs.

The CMS said it would also “explore possible actions with the MACs that might reduce the number of returned MSNs that can be performed within reasonable costs.”

To contact the reporter on this story: James Swann in Washington at jswann1@bna.com

To contact the editor responsible for this story: Ward Pimley at wpimley@bna.com


The OIG report is at http://oig.hhs.gov/oei/reports/oei-03-12-00600.pdf.