A new HHS Office of Inspector General report found that managed care organizations (MCOs) and states can do more to stop billions of dollars lost to fraud, waste and abuse.
Some MCOs aren't using proactive data analysis, which the report called a “critical tool for fraud identification.” They also referred few cases of suspected abuse to states in 2015.
MCOs additionally didn't inform states of suspected fraud or abuse involving providers. This includes when payers terminated provider contracts because of fraud or abuse.
OIG reviewed 2015 data from MCOs with the largest expenditures in each of the 38 states with Medicaid managed care programs. Investigators also interviewed officials from five MCOs and states.
More than three dozen states have turned to payers for Medicaid managed care programs as a way to reduce costs. The report said 80% of all Medicaid enrollees in 2015 were in managed care programs.
Despite that growth, the OIG said fraud remains a problem. Program integrity issues in Medicaid led care hasn't received the same attention as Medicaid fee-for-service.
One area of concern is states not flagging overpayments associated with fraud or abuse, according to the report. “These weaknesses may limit states’ ability to effectively address fraud and abuse in their Medicaid programs,” it read.
States used encounter data to conduct their own analysis. However, the data are limited, according to the report.
OIG offered potential improvements involving greater collaboration between CMS and states, including:
- Improve MCO identification and referral of suspected fraud or abuse.
- Increase MCO reporting of corrective actions involving providers suspected of fraud or abuse.
- Clarify what data MCOs must report concerning terminated providers or those who leave the MCO network.
- Identify best practices about payment-retention policies and incentives to increase recoveries.
- Improve coordination between MCOs and states and standardize reporting.
- Monitor encounter data and impose penalties on states for submitting inaccurate or incomplete data.
OIG said CMS concurred with all of the recommendations except one. CMS questioned the item about standardizing the states' reporting of referrals, saying states need the flexibility to determine the processes that work best for them individually.
Medicaid spending doesn't just affect states. As Medicaid has grown, mainly through expansion in the Affordable Care Act, the program’s costs have increased from $456 billion in 2013 to $576 billion in 2016. The federal government is picking up a large part of that increase.
CMS recently announced its plans to increase Medicaid fraud enforcement. CMS Administrator Seema Verma said the effort includes new initiatives that use analytical tools “to hold states accountable.”
The agency's plans include increased state claim audits for federal matching funds, medical loss ratio review and state benefit eligibility determinations.
The Department of Justice has had some success in tackling fraud. DOJ recently announced its largest healthcare fraud takedown ever. The investigation included 601 people for falsely billing Medicare, Medicaid and the U.S. military’s TRICARE program for more than $2 billion.