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

Executive Summary

The GAO report identifies the VA Community Care program and CMS’s Medicare Advantage program as high-priority improper payment risks for fiscal year 2025. VA reported a Community Care improper payment estimate of $608 million (2.4 percent of outlays) for FY2025; CMS reported a Medicare Advantage improper payment estimate of $23.7 billion (6.1 percent of outlays) for FY2025. GAO found that VA has implemented root-cause processes and corrective actions for Community Care but lacks a comprehensive fraud risk assessment; CMS has implemented root-cause processes for Medicare Advantage but has inadequate corrective action plans, a backlog of RADV audits, and no comprehensive fraud risk assessment. The GAO work covered November 2024 through June 2026.

For contractors across the healthcare-related market segments identified in the Tags, this creates immediate programmatic risk and procurement opportunity. Risk stems from heightened agency scrutiny, potential expansion of audit and recovery activity (notably RADV-related work for Medicare Advantage), and likely demand for improved fraud risk assessments and corrective-action support. Opportunity exists for vendors that can provide analytics, RADV audit support, medical auditing, claims-processing modernization, revenue-cycle services, fraud-detection tooling, and compliance remediation aligned with the Payment Integrity Information Act and Improper Payments Elimination and Recovery Act. Contractors should prioritize capability statements, staffing for audit/analytics engagements, and compliance offerings now to position for near-term work tied to these agency priorities.

Impact Matrix

Healthcare Services

Risk Level: Medium
Opportunity: Support program integrity efforts in VA Community Care and Medicare Advantage (program names are in the Summary). Specific opportunities TBD pending solicitation language. Relevant NAICS from Tags include health-care provider and facility codes; contractors may pursue prime/sub roles under VA vehicles listed in Tags.
Timeline: FY2025 (GAO reported estimates); GAO review covered Nov 2024–June 2026.
Action Required: Prepare proposals and capability statements for corrective-action work, support for program-level process improvement, and integration with agency integrity efforts; ensure staff familiar with improper-payment frameworks referenced in the Tags.
Competitive Edge: Offer integrated service bundles that combine clinical operations knowledge with audit-support capabilities to help agencies reduce root causes of improper payments.

Medical Services

Risk Level: Medium
Opportunity: Clinical documentation and service-level reviews to reduce improper payments in Community Care and Medicare Advantage. Specific opportunities TBD pending solicitation language.
Timeline: FY2025; GAO review Nov 2024–June 2026.
Action Required: Strengthen clinical audit capabilities, prepare to support corrective-action plans, and align clinical documentation improvement efforts with agency audit needs.
Competitive Edge: Build teams with both clinical and audit expertise to reduce denials and improper payment exposure for program providers.

Healthcare IT

Risk Level: High
Opportunity: Tools and platforms for analytics, RADV audit support, claims validation, and fraud detection. Specific opportunities TBD pending solicitation language. Relevant professional services NAICS in Tags may apply.
Timeline: FY2025; GAO review Nov 2024–June 2026.
Action Required: Ready analytics and data-integration offerings that can ingest agency data, produce root-cause analysis, and support expedited audit processes; ensure alignment with compliance surfaces in Tags (e.g., HIPAA, HITECH).
Competitive Edge: Deliver scalable analytics and automation that reduce audit backlogs and accelerate RADV-related workflows.

Revenue Cycle Management

Risk Level: High
Opportunity: Services to identify and remediate improper payments in claims adjudication and recovery processes for Medicare Advantage and VA Community Care. Specific opportunities TBD pending solicitation language.
Timeline: FY2025; GAO review Nov 2024–June 2026.
Action Required: Demonstrate ability to tighten controls across intake, coding, billing, and appeals; support agencies’ corrective-action monitoring and recovery efforts.
Competitive Edge: Offer end-to-end RCM solutions tied to audit outcomes and recovery metrics to reduce improper payment rates.

Healthcare Claims Processing

Risk Level: High
Opportunity: Process improvement, denial management, and claims-audit support to help agencies reduce improper payments. Specific opportunities TBD pending solicitation language.
Timeline: FY2025; GAO review Nov 2024–June 2026.
Action Required: Prepare to respond to increased demand for claims-validation and remediation services; align systems to produce audit-ready evidence.
Competitive Edge: Provide automation that reduces manual claims errors and creates traceable audit trails.

Medical Billing and Coding

Risk Level: High
Opportunity: Coding audits, education, and correction programs that address root causes of improper payments. Specific opportunities TBD pending solicitation language.
Timeline: FY2025; GAO review Nov 2024–June 2026.
Action Required: Scale coding audit teams and offer corrective-action training tied to identified root causes.
Competitive Edge: Combine coding accuracy programs with analytics that prioritize highest-risk claim populations for remediation.

Healthcare Fraud Detection

Risk Level: Critical
Opportunity: Development and delivery of comprehensive fraud risk assessments and detection/prevention tools for VA Community Care and Medicare Advantage; agencies currently lack comprehensive fraud risk assessments per GAO. Specific opportunities TBD pending solicitation language.
Timeline: FY2025; GAO review Nov 2024–June 2026.
Action Required: Position offerings to fill the documented fraud assessment gap (design, likelihood/impact assessment, controls evaluation, fraud risk profiling) and propose rapid-deployment fraud detection solutions.
Competitive Edge: Provide proven fraud-risk-assessment methodologies and tooling that map directly to the fraud-risk elements GAO found missing.

Healthcare Analytics

Risk Level: Critical
Opportunity: Root-cause analytics, predictive models to flag improper payments, and support for RADV/audit prioritization. Specific opportunities TBD pending solicitation language.
Timeline: FY2025; GAO review Nov 2024–June 2026.
Action Required: Bring validated models and analytics workflows that can help agencies prioritize audits and corrective actions, and quantify recovery opportunity.
Competitive Edge: Combine predictive analytics with audit workflow integrations to help agencies reduce backlog and speed recoveries.

Risk Adjustment Services

Risk Level: Critical
Opportunity: Support for RADV audit acceleration, RADV-ready documentation workflows, and corrective action tied to risk-adjustment findings; GAO specifically notes RADV backlog as a barrier. Specific opportunities TBD pending solicitation language.
Timeline: FY2025; GAO review Nov 2024–June 2026.
Action Required: Prepare RADV audit capacity, documentation-validation services, and process designs that address RADV backlogs and speed recoveries.
Competitive Edge: Offer end-to-end RADV audit teams plus analytics to prioritize and triage high-recovery potential cases.

Medical Auditing Services

Risk Level: Critical
Opportunity: Expanded demand for auditing services to support corrective actions, RADV audits, and improper-payment recovery. Specific opportunities TBD pending solicitation language.
Timeline: FY2025; GAO review Nov 2024–June 2026.
Action Required: Scale certified audit capabilities, align methodologies to agency expectations, and document chain-of-evidence for recoveries.
Competitive Edge: Maintain clearance-ready audit teams and standardized deliverables that reduce agency overhead in audit intake and tracking.

Healthcare Compliance

Risk Level: High
Opportunity: Compliance program design and implementation to meet payment-integrity statutes and agency corrective-action expectations (statutes in Tags: Improper Payments Elimination and Recovery Act; Payment Integrity Information Act). Specific opportunities TBD pending solicitation language.
Timeline: FY2025; GAO review Nov 2024–June 2026.
Action Required: Offer services to develop fraud risk assessments, corrective-action plans with measurable milestones, and monitoring frameworks that meet GAO-identified gaps.
Competitive Edge: Combine legal/regulatory expertise with program-management tools to demonstrate measurable reductions in improper payment exposure.

Managed Care

Risk Level: Critical
Opportunity: Consulting and technical support for Medicare Advantage plan integrity, including RADV-related support and corrective-action implementation. Specific opportunities TBD pending solicitation language.
Timeline: FY2025; GAO review Nov 2024–June 2026.
Action Required: Position offerings to support payers and agencies on risk-adjustment validation, auditing, and corrective action; prepare for increased scrutiny tied to GAO findings.
Competitive Edge: Provide payer-focused solutions that directly address RADV and risk-adjustment control weaknesses documented by GAO.

Third Party Administration

Risk Level: High
Opportunity: TPA roles in claims processing, audit support, and recovery efforts for program integrity initiatives. Specific opportunities TBD pending solicitation language; VA contract vehicles in Tags (e.g., VA FSS Schedule 65, T4NG, Stratton VA Medical Center BPAs) may be relevant for VA support roles.
Timeline: FY2025; GAO review Nov 2024–June 2026.
Action Required: Demonstrate experience in handling audit-driven recoveries and corrective actions; ensure processes meet payment-integrity and data-protection requirements.
Competitive Edge: Offer flexible TPA arrangements that can be stood up rapidly to help agencies reduce audit backlogs and implement corrective actions.

Cross-Segment Implications

The GAO findings create demand across analytics, audit, RCM, risk-adjustment, and compliance segments: effective fraud detection and corrective-action programs require integration of Healthcare IT, Analytics, Medical Auditing, and Compliance capabilities. Agencies’ inability to complete comprehensive fraud risk assessments and RADV backlogs implies simultaneous needs for short-term audit surge capacity (Medical Auditing, Risk Adjustment Services) and longer-term systems and process fixes (Healthcare IT, Revenue Cycle Management, Healthcare Compliance).
Improvements in one segment (for example, faster RADV audits enabled by analytics and audit teams) will reduce recovery backlogs and increase demand for downstream Revenue Cycle and Claims Processing remediation. Conversely, persistent gaps in fraud risk assessment will sustain demand for fraud-detection vendors and compliance advisors.
VA-focused contracting vehicles listed in Tags may provide procurement paths for vendors concentrating on Community Care work, but overall work for Medicare Advantage will likely flow through HHS/CMS channels — coordination across Managed Care, Risk Adjustment, and Healthcare Fraud Detection segments will be strategically important.