OIG questions fraud efforts of Medicaid managed care plans

WASHINGTON – CMS needs to follow up with states that have Medicaid managed care plans to ensure they are working to combat fraud, according to a new report from the Office of Inspector General (OIG). 

The reports states CMS should: 

1. Follow up with states that had Medicaid managed care plans with no referrals of potential provider fraud, waste or abuse in 2022; and 

2. Encourage states to increase the number of Medicaid managed care plans that have received state-led training on the fraud referral process. 

The OIG notes that Medicaid managed care plans are required to identify and refer potential fraud, waste or abuse—including provider fraud—to the state and/or Medicaid Fraud Control Unit (MFCU) for further investigation and enforcement. CMS and HHS-OIG, however, have cited concerns about efforts by these plans to combat fraud, including a lack of fraud referrals and few incentives to produce them. 

As part of its investigation, the OIG found: 

• 10% of plans reported that they did not make any referrals of potential provider fraud, waste or abuse in 2022. Combined, these plans covered 1.6 million enrollees and received $8 billion in payments from 13 states. 

• Of the plans that reported making provider referrals in 2022, more than half made two or fewer referrals per 10,000 enrollees. 

• Plans that received training from the state or MFCU on the fraud referral process made more provider referrals. However, only half of plans reported that they received such training. 

• Plans with fraud referral staff dedicated solely to that Medicaid plan made more provider referrals than plans with staff working across programs. However, 78% of plans reported that their fraud referral staff shared program integrity responsibilities across programs (e.g., another health care line of business). 

CMS did not explicitly concur or not concur with the OIG’s first recommendation but indicated that it has undertaken and plans to continue such followup. The agency concurred with the second recommendation.