GAO finds fragmented oversight of Medicaid

Tuesday, June 16, 2015

WASHINGTON – CMS needs to do a better job overseeing Medicaid managed care, the Government Accountability Office says in a report public released June 18.

The GAO found that the program integrity units of five states and the Medicaid Fraud Control Units of seven states that were included in its review focus their efforts on Medicaid fee-for-service payments, not Medicaid managed care payments. This, the GAO points out, despite the fact that Medicaid managed care is growing at a faster rate than fee-for-service.

Moreover, while CMS has delegated oversight of Medicaid managed care to states, it does not require them to audit these payments.

“Unless CMS takes a larger role in holding states accountable, and provides guidance and support to states to ensure adequate program integrity efforts in Medicaid managed care, the gap between state and federal efforts to monitor managed care program integrity will leave a growing portion of federal Medicaid dollars vulnerable to improper payments,” the GAO stated in its report.

Of the $431.1 billion that the government spent on Medicaid in fiscal year 2013, $14.4 billion or 5.8% were improper payments, according to the GAO.

The GAO recommends that CMS increase its oversight by:

1.   requiring states to audit payment to and by managed care organizations;

2.   updating its guidance on Medicaid managed care program integrity; and

3.   providing states additional support for managed care oversight, such as audit assistance from existing contractors.

CMS asked for clarification on the first recommendation, and concurred with the second and third recommendations.

On the first recommendation, the GAO said it would like to see CMS take the added step of requiring states to audit the appropriateness of payments to and by managed care organizations to better ensure Medicaid program integrity.