OIG: States face challenges in implementing Medicaid payment suspensions

States overall use few Medicaid payment suspensions due to implementation challenges, suggests a report by HHS' Office of Inspector General.

Payment suspensions are assessed when there are credible fraud allegations against the provider. That is, "unless 'good cause' exists not to suspend payment," according to the OIG. 

For its report, the OIG examined Medicaid agencies' self-reported individual case data for credible fraud allegations, payment suspensions and good cause exceptions during the federal fiscal year ending Sept. 30, 2014. The office said it also asked all 56 Medicaid agencies and all 50 Medicaid Fraud Control Units about the challenges and benefits of payment suspensions.

The analysis found 41 of the 56 Medicaid agencies reported assessing 10 or fewer payment suspensions during the time period studied. Ten states reported 11 to 20 payment suspensions, and only two states reported 51 or more payment suspensions.

The OIG said Medicaid agencies also reported "significant challenges" related to payment suspensions, such as "demonstrating sufficient evidence to support payment suspensions when providers appealed" and "not jeopardizing law enforcement investigations when providers appealed." 

Additionally, many Medicaid agencies reported using good cause exemptions while law enforcement looked into a credible fraud allegation, according to the OIG. "Medicaid agencies [also] reported taking actions that improved their processes for payment suspensions, including how they handle fraud allegations and collaborate with law enforcement," the office added.

The OIG recommended CMS "provide additional technical assistance to help Medicaid agencies fully utilize Medicaid payment suspensions as a program integrity tool." The office said CMS agreed with its recommendation.


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