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Mohini Venkatesh

, National Council for Behavioral Health

GAO Finds Gaps in CMS’ Oversight of Medicaid Managed Care

June 23, 2014 | Uncategorized | Comments
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A recent Government Accountability Office (GAO) report identifies shortcomings of the Centers for Medicare & Medicaid Services’ (CMS) existing oversight of Medicaid managed care, noting among other things, for example, that CMS “has largely delegated managed care program integrity oversight activities to the states, but has not updated its program integrity guidance since 2000.” The GAO also indicates that the agency “does not require states to audit managed care payments” despite officials being interviewed who noted their need for further assistance.

Federal laws require the states and the Centers for Medicare & Medicaid Services (CMS) to ensure the integrity of the Medicaid program, including payments under Medicaid managed care, which are growing at a faster rate than payments under fee-for-service (FFS). However, five state program integrity (PI) units and four Medicaid Fraud Control Units (MFCU) from the seven states included in GAO’s review said they primarily focus their efforts on Medicaid FFS claims and have not begun to closely examine program integrity in Medicaid managed care.

Because of the gap GAO identified between state and federal program integrity efforts in managed care, neither state nor federal entities are well positioned to identify improper payments made to managed care organizations (MCOs), nor are they able to ensure that MCOs are taking appropriate actions to identify, prevent, or discourage improper payments.

As a result of these findings, the GAO recommends that CMS: (1) “increase its oversight of program integrity efforts by requiring states to audit payments to and by [Managed Care Organizations (MCOs)]”; (2) “update[e] its guidance on Medicaid managed care program integrity”; and (3) “provid[e] states additional support for managed care oversight, such as audit assistance from existing contractors.”