In fiscal year 2013, the Medicaid program spent $431.1 billion to cover about 71.7 individuals, according to the report. CMS has estimated improper payments accounted for $14.4 billion (5.8 percent) of that amount. Like HMOs, MCOs agree to provide Medicaid benefits to people in exchange for monthly payments from the state. During the past 15 years, states have increasingly implemented managed care delivery systems for managed care benefits, and nearly 50 million people receive benefits through some form of managed care, according to the federal government.
Although multiple state and federal entities already perform program integrity duties (such as payment review, auditing and investigating fraud), the GAO has found gaps in these efforts. According to the report, five state program integrity units and four Medicaid Fraud Control Units from seven states reported focusing primarily on Medicaid fee-for-service claims and not closely examining program integrity in Medicaid managed care.
Additionally, the GAO found federal entities have taken few actions to address Medicaid managed care program integrity. CMS hasn’t updated its program integrity guidance since 2000, and the agency doesn’t require states to audit managed care payments. Overall, neither state nor federal entities are well-positioned to identify improper payments to MCOs, according to the report.
It’s imperative that CMS increase oversight, especially as states expand their Medicaid programs under the Patient Protection and Affordable Care Act, according to the GAO. “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 report states.
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