On October 29, 2010, U.S. Senator Charles Grassley of Iowa, the Ranking Member of the Senate Committee on Finance, wrote to Centers for Medicare and Medicaid Services (CMS) Administrator Donald Berwick, M.D. to express concern about potential conflicts of interest for Program Safeguard Contractors (PSCs) and Zone Program Integrity Contractors (ZPICs), two types of Medicare program integrity contractors. Senator Grassley asked Administrator Berwick to determine whether some PSCs and ZPICs may be faced with conflicts of interest due to the relationships that these contractors maintain with either parent companies or subsidiaries performing other contractual functions for CMS or which are affiliated with private payors.

PSCs and ZPICs are unique Medicare contractors because they are charged with identifying and investigating potential fraud and abuse in the program. These contractors have the authority to conduct data analysis of claims submissions, initiate investigations of providers, and are expected to refer suspected fraud or abuse to law enforcement.

Senator Grassley’s letter questions whether a PSC or ZPIC may have conflicts of interest “created by the organizational relationships between certain CMS contractors.” Accordingly, Senator Grassley requests Administrator Berwick to report by November 19, 2010 the “steps CMS has taken to ensure that all potential financial conflicts between the PSCs/ZPICs and other companies doing business with CMS were and can be identified,” among other things. Senator Grassley’s letter is available by clicking here.

This is the third letter that Senator Grassley has sent to Administrator Berwick regarding PSCs and ZPICs this month. On October 6 and October 15 of this month, Senator Grassley wrote to Administrator Berwick to express concern regarding CMS’s lack of management and oversight of these government contractors. In his letters, Senator Grassley voices concerns that PSCs are failing to open new investigations and to refer potential fraudulent activities to appropriate law enforcement agencies. The October 15 letter is available by clicking here. The October 6 letter is available by clicking here.