California House Members Fault Medicare Auditing Firm
In a meeting on Wednesday, members of California's congressional delegation with CMS alleged that PRG-Schultz International's contract to review Medicare claims submitted by California hospitals is boosting the company's profit at the expense of patient care, the Sacramento Bee reports (Whitney, Sacramento Bee, 8/3).
Under a contract with CMS, PRG-Schultz reviews Medicare claims submitted by hospitals to help root out improper payments. In 2005, the practice began as a pilot program in California, Florida and New York, but it since has been made permanent and will be expanded to other states.
Government records show that PRG-Schultz has rejected about $100 million in claims since its contract began (California Healthline, 8/3).
The meeting was in response to a letter signed by 36 California lawmakers concerned about PRG-Schultz.
Rep. Lois Capps (D-Calif.) said, "Providers are now going bankrupt, frankly, because of this arduous process."
Rep. Devin Nunes (R-Calif.) said, "They either fix this, or we will fix it for them."
PRG-Schultz officials said CMS reviewed its audits on behalf of a request by Sen. Dianne Feinstein (D-Calif.) and found that its claims rejections are correct and its procedures are proper. Feinstein's husband's investment company owns a large stake in PRG-Schultz.
The company on Thursday announced that its second-quarter earnings had grown to $18.6 million from a loss of $3.6 million during the same period in 2006.
Company officials attributed most of its net revenue to the sale of a business unit, although James McCurry, president and chair of PRG-Schultz, said that profits from the California auditing contract were "an important contribution to our revenue for the quarter" (Sacramento Bee, 8/3).