CQRC Applauds E&C Committee for New Report Detailing CMS’s Fraud Investigations and Recommendations for Ceasing ‘Pay and Chase’ Model

Improper payments highlighted in House E&C’s Majority Staff Report underscore the need for continued program integrity efforts and legislative solutions, including the SOAR Act

WASHINGTON – The Council for Quality Respiratory Care (CQRC) – a coalition of the nation’s six leading home oxygen therapy provider and manufacturing companies – today commended the House Committee on Energy and Commerce and Chair Brett Guthrie (KY-2), and Subcommittee Chairs John Joyce, M.D. (R-PA) and Morgan Griffith (VA-09), for releasing a report on emergent fraud trends impacting Medicare and Medicaid services across the nation. The investigative findings reveal concerning patterns of fraud that substantially affect program integrity and put beneficiaries’ access to care at risk. The report emphasizes the need for innovative tools and technology-based solutions to improve fraud detection and mitigation.

According to the Committee’s recommendations, traditional ‘pay and chase’ approaches used to identify and address Medicare and Medicaid fraud must be replaced with preventive fraud detection methods that identify improper payments, rather than relying on post-loss recovery efforts. Millions of taxpayer dollars are lost each year to improper payments, including 74.2% due to insufficient documentation, according to CMS Comprehensive Error Rate Testing (CERT) data. CQRC has previously commended the Energy & Commerce Committee for recognizing the need for sufficient documentation before a claim is paid.

Representatives Valadao, Brownley, Smith, and Evans introduced legislation to stop pay and chase in supplemental oxygen as part of the Supplemental Oxygen Access Reform (SOAR) Act (H.R. 2902/S. 1406). The provision, requiring CMS to adopt a standardized electronic template, would help prevent fraudulent or abusive claims by providing CMS and its contractors with the information needed to establish medical necessity before a claim is paid. The electronic template would improve clarity and accuracy in the Medicare review process, reducing improper payments linked to the current order process and contractors’ reliance on physician chart notes, thereby preventing fraud before it occurs. In 2025, HHS estimated improper payments for oxygen cost the government approximately $80 million.

CQRC commends ‘detect and prevent’ program integrity efforts and urges the Energy & Commerce Committee to pass the SOAR Act and its legislative solution that aligns with this approach.

The CQRC previously commended the E&C Committee for holding a January 8legislative hearing on Improving Medicare Payment Policies for Seniors, which highlighted the SOAR Act as reform to address barriers to care for individuals who need medical oxygen to manage their respiratory and pulmonary diseases.

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