By Jeffrey H. Brochin, J.D.
A Government Accountability Office (GAO) study examined CMS’s oversight and support of states’ Medicaid program integrity efforts and found that although collaborative audits—in which CMS contractors and states worked in partnership—identified substantial potential overpayments to providers, various barriers limited the use of those audits. While CMS encouraged states to use collaborative audits, it was left up to the states to decide whether to pursue them. Several states reported positive collaborative audit experiences, while others cited barriers—such as staff burden or problems communicating with contractors—that prevented them from seeking audits or hindered the success of those audits. The GAO report recommended that CMS take additional steps to collect and share promising program integrity practices with the states. (GAO Report, GAO-17-277, April 17, 2017).
Why the GAO conducted the study. Improper payments are a significant and growing cost to the Medicaid program, with the most recent increase rising from an estimated 9.8 percent ($29 billion) of federal Medicaid expenditures in fiscal year (FY) 2015 to 10.5 percent ($36 billion) in FY 2016. Based on those figures alone, it is clear that Medicaid remains a high risk program partly due to the occurrence of improper payments. CMS has tailored state program integrity reviews—in which CMS reviews states’ program integrity activities—to states’ managed care delivery systems and other areas at high risk for improper payments, including provider enrollment and screening provisions required by section 6401 of the ACA. The GAO was asked to examine the states’ Medicaid program integrity efforts with particular attention being paid to: (1) how CMS tailors its reviews to states’ circumstances; (2) the states’ experiences with collaborative audits; and (3) CMS’s steps to share promising program integrity practices. GAO reviewed CMS documents, including state program integrity reports and data on collaborative audits, and also interviewed officials from CMS and eight states selected based on expenditures, managed care use, and the number of collaborative audits. In addition, the GAO included a mix of states that expanded their Medicaid programs as allowed under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), along with those that did not.
Center for Program Integrity. CMS’s Center for Program Integrity has served as the agency’s focal point for Medicaid and Medicare program integrity issues. Initially, CMS’s Medicaid program integrity activities were administered by a unit separate from its Medicare program integrity activities; however, in an effort to strengthen and better coordinate its program integrity efforts, CMS reorganized the Center for Program Integrity in 2014 to align functional activities and integrate Medicaid and Medicare program integrity efforts where possible. CMS maintains a range of program integrity activities that are important to overseeing and supporting states’ Medicaid programs, and several of its core activities have undergone changes in recent years.
CMS’s on-site reviews. From 2014 through 2016, CMS conducted on-site reviews in 31 states. The reviews usually addressed state oversight of managed care plans, and some reviews addressed other high-risk areas such as provider enrollment. CMS and the states found the reviews to be beneficial in identifying areas for improvement; however, in order to expand oversight to more states, CMS has also begun off-site desk reviews of certain state program integrity efforts.
Reluctance to pursue collaborative audits. Among the findings of the GAO performance audit conducted between September, 2015 and March, 2017, was that although federal control standards indicate that organizations should identify and respond to risks related to achieving objectives, absent additional CMS action to address barriers, some states have chosen not to pursue collaborative audits, or they have encountered challenges after doing so. Part of the reason was because CMS lacked a systematic approach to collecting promising state program integrity practices and communicating them to other states. CMS’s main approach—the state program integrity reviews—inconsistently identified promising practices, and those identified were neither published in a timely way nor easily searched electronically. Other CMS approaches, such as courses offered by the Medicaid Integrity Institute (a national training program for states), were not designed for sharing promising practices and did not systematically communicate them to all states. Both CMS and the states have a role in identifying promising program integrity practices, but in the absence of further agency action, states may not have access to the full range of promising state program integrity practices. That situation is inconsistent with federal internal control standards on the use and external communication of necessary quality information to achieve program objectives.
Study conclusions. The GAO study found that CMS has taken a number of important steps to tailor and improve its oversight and support of states’ Medicaid program integrity efforts, including its use of use of focused reviews. It noted that while it is too soon to tell how effective CMS’s new desk reviews will be in enhancing oversight, CMS plans to further assess how well those two types of reviews, when taken together, meet the agency’s needs and whether additional changes could be useful. CMS’s shift to collaborative audits has helped identify a substantial amount of potential overpayments and has yielded important benefits for some states, including those who related to the GAO that they viewed collaborative audits as an important part of their program integrity efforts.
Recommendations. To build upon CMS’s collaborative audit efforts and to help enhance future collaboration, the GAO recommended that CMS should identify opportunities to address barriers that limit states’ participation in collaborative audits. Such opportunities could include improving communication with states before, during, and after audits are completed, and ensuring that audits align with states’ program integrity needs, including the need for oversight of services provided in managed care delivery systems. To better support states’ efforts to reduce improper payments and communicate effective program integrity practices across the states, CMS should collaborate with states to: (1) develop a systematic approach to collect promising state program integrity practices, and (2) create and implement a communication strategy for sharing promising program integrity practices with states in an efficient and timely manner.
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