Program Integrity: Actions Needed to Reduce Improper Paym...

Overview

The GAO has designated VA’s Community Care program and HHS’s Medicare Advantage program as high-priority for improper payments for fiscal year 2025. VA reported an estimated $608 million (2.4% of outlays) in Community Care improper payments for FY2025, and CMS reported an estimated $23.7 billion (6.1% of outlays) in Medicare Advantage improper payments for FY2025. GAO found that VA has processes for identifying root causes and corrective actions for improper payments but lacks a comprehensive fraud risk assessment for Community Care. GAO found that CMS has root-cause processes for Medicare Advantage but its corrective action plans (including RADV audit execution and backlog management) are insufficiently detailed and CMS also lacks a comprehensive fraud risk assessment. For contractors serving these markets (healthcare services, revenue cycle, risk adjustment, claims processing, analytics, auditing, managed care, and related IT/third-party administration), this increases near-term scrutiny, potential audit activity, and procurement emphasis on fraud detection, timely RADV support, and corrective-action execution. Action is needed now to review contracts, strengthen controls around claims and risk-adjustment data, prepare to support RADV and audit workflows, and to track further agency guidance or solicitations.

Immediate Actions (This Week)

[ ] Inventory active work and proposals that touch VA Community Care or Medicare Advantage flows (claims submission, risk adjustment, RADV support, auditing, billing/coding, analytics) and flag potential exposure points.
[ ] Review contract clauses and delivery orders under affected vehicles and IDIQs you hold (or target) for language related to improper payments, recovery, audits, and audit support; prepare a list of contract points requiring quick updates to workflows.
[ ] Identify personnel and SMEs who would support RADV audits, recoveries, or fraud investigations and confirm availability and qualification to serve as points of contact.
[ ] Monitor GAO, PaymentAccuracy.gov, VA, and CMS channels for follow-up guidance or corrective-action plans and set alerts for new solicitations and audit-related notices (Monitor for the official solicitation or guidance).
[ ] Run a quick gap check of claims submissions and risk-adjustment pipelines for obvious data quality issues that could trigger RADV findings (missing documentation, incomplete encounter records, coding outliers).

Short-Term Actions (30 Days)

[ ] Build or refresh a RADV/audit response playbook: evidence collection checklist, timelines, assigned owners, and secure transfer methods for supporting documentation.
[ ] Conduct a focused fraud-risk brainstorming session for affected contract lines and produce a prioritized list of inherent fraud risks and existing controls; document immediate mitigation steps you can implement within 30 days.

Long-Term Actions (90+ Days)

[ ] Implement sustained corrective-action and monitoring plans on high-priority root causes (data quality, coding accuracy, eligibility verification). Track metrics (error rates, recovery amounts, audit turnaround) and iterate quarterly.
[ ] Prepare capability statements, compliance matrices, and capture materials emphasizing RADV/audit support, fraud risk assessments, and corrective-action monitoring to position for IDIQ (Indefinite Delivery/Indefinite Quantity)/task order opportunities or BPAs that may arise from increased agency activity.

Compliance Checklist

[ ] HIPAA / HITECH: Verify that protected health information (PHI) handling, transmission, storage, and disclosures for claims, encounter data, and RADV support comply with HIPAA and HITECH privacy and security requirements.
[ ] FAR (Federal Acquisition Regulation) Part 31: Ensure cost accounting and billing practices for reimbursable items comply with FAR Part 31 principles where applicable.
[ ] DFARS (Defense Federal Acquisition Regulation Supplement) 252.242-7006: For contracts that incorporate this clause, validate your accounting and records controls align with the clause’s requirements.
[ ] Improper Payments Elimination and Recovery Act / Payment Integrity Information Act: Prepare to support information requests and recovery actions consistent with these statutes and agency payment-integrity programs.
[ ] Compliance scope TBD — re-evaluate when official guidance is published for any additional agency-specific audit or fraud-assessment requirements.

Resources

PaymentAccuracy.gov — primary public portal on improper payments and agency reporting: https://paymentaccuracy.gov/
U.S. Department of Veterans Affairs — agency home and community care program pages: https://www.va.gov/
Centers for Medicare & Medicaid Services (CMS) — Medicare Advantage and program guidance: https://www.cms.gov/
HIPAA (HHS Office for Civil Rights): https://www.hhs.gov/hipaa/index.html
FAR Part 31 (cost principles) — acquisition.gov: https://www.acquisition.gov/far/part-31

How Cabrillo Club Automates This

Cabrillo Signals War Room — Already detected this event and delivered this briefing within minutes. War Room continuously monitors GAO publications, PaymentAccuracy.gov, agency announcements, and procurement portals so you receive immediate alerts when new corrective-action plans, RADV audit notices, or solicitation updates are published. For this event War Room has flagged VA Community Care and Medicare Advantage as high-priority budget actions and will push follow-up alerts as agencies publish guidance or solicitations.
Cabrillo Signals Match Engine — When events like this shift program risk and agency priorities, Match Engine automatically rescors your opportunity pipeline. It updates match scores for opportunities tied to Medicare Advantage, VA Community Care, and related NAICS profiles listed in your account, reprioritizing leads that require RADV/audit support, claims-processing remediation, or fraud-risk capabilities.
Cabrillo Signals Intelligence Hub — Tracks affected agencies, vehicles, and market signals and lets you create saved searches for follow-on solicitations and audit-related notices. For this event, configure a saved search to watch for RADV audit solicitations, corrective-action funding opportunities, and task/order level procurement actions tied to VA or CMS program integrity work.
Proposal Studio (Proposal OS) — Generates compliance matrices and first-draft technical approaches that highlight RADV/audit response capabilities, fraud risk assessment services, and corrective-action monitoring. Use Proposal OS to assemble past performance snippets, create targeted win themes around payment-integrity support, and produce documentation packages that demonstrate readiness to assist with CMS or VA recovery and audit activities.
Proposal Studio Workflow Tracker — Triggers a 9-gate capture workflow for high-priority opportunities tied to this event: opportunity intake, compliance review (HIPAA/HITECH/FAR Part 31), RADV evidence readiness, capture strategy, proposal build, legal review, final QA, submission, and post-submission audit-readiness handoff. The Workflow Tracker routes reviews to your contracts and legal teams and maintains audit-ready documentation of decisions and certifications.

Call to action: Use your Cabrillo Signals War Room briefing to seed saved searches in the Intelligence Hub, let Match Engine reprioritize your pipeline, and spin up Proposal Studio templates for RADV/audit-capability proposals. For capture guidance see the Winning Federal Contracts Guide (/insights/winning-federal-contracts) and for compliance references see the CMMC (Cybersecurity Maturity Model Certification) Compliance Guide (/insights/cmmc-compliance-guide) and the CUI (Controlled Unclassified Information)-Safe CRM Guide (/insights/cui-safe-crm-guide).