Health Reform WK-EDGE Terminated providers still serving Medicaid beneficiaries in violation of the Cures Act
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Wednesday, April 22, 2020

Terminated providers still serving Medicaid beneficiaries in violation of the Cures Act

By Elena Eyber, J.D.

Eleven percent of terminated providers were still able to serve Medicaid beneficiaries and only eight States had managed care contracts that clearly prohibited terminated providers.

The HHS Office of Inspector General (OIG) found that 11 percent of terminated providers were still able to serve Medicaid beneficiaries, and only eight States had managed care contracts that clearly included the required Cures Act provision that prohibits terminated providers from participating in Medicaid managed care networks, according to a review of state Medicaid program provider termination oversight (OIG Report, No. OEI-03-19-00070, March 30, 2020).

The OIG conducted the review to determine the extent to which providers terminated for cause continued to be enrolled in State Medicaid programs and the amount that Medicaid paid for items or services associated with providers terminated for cause. The OIG also sought to determine the extent to which States included provisions in their contracts with managed care organizations (MCOs) requiring that terminated providers be prohibited from participating in Medicaid managed care networks, and the amount that Medicaid paid to MCOs with contracts that did not include the provision.

Findings. The OIG found that nearly 1,000 terminated providers (11 percent of all terminated providers) were inappropriately enrolled in state Medicaid programs or were associated with $50.3 million in Medicaid payments after being terminated. These providers had been terminated for reasons such as criminal convictions, licensure issues, and provider misconduct and thus potentially posed a risk to beneficiaries’ safety and quality of care.

Additionally, the OIG found that only eight states’ managed care contracts clearly included the provision required by the 21st Century Cures Act (Cures Act) that prohibits terminated providers from participating in Medicaid managed care networks. This vulnerability allowed terminated providers to serve Medicaid beneficiaries and reduced states’ ability to limit these providers’ participation in Medicaid managed care networks. CMS did not check for this required Cures Act provision when reviewing states’ contracts with MCOs. Overall, states paid at least $62.3 billion in capitation payments to plans under contracts that did not include the required provision.

Finally, the OIG found that states did not always provide complete and accurate Medicaid data to CMS, which limited the OIG’s analysis of claims, encounter records, and payments associated with terminated providers. Therefore, the OIG’s findings understated the payments associated with contracts that did not contain the required Cures Act provision and understated the payments associated with terminated providers.

Recommendations. To promote states’ compliance with the requirements of the Cures Act, the OIG recommended that CMS: (1) recover from states the federal share of inappropriate fee-for-service Medicaid payments associated with terminated providers; (2) implement a method to recover from states the federal share of inappropriate managed care capitation payments associated with terminated providers; (3) follow up with states to remove terminated providers that OIG identified as inappropriately enrolled in Medicaid; (4) confirm that states do not continue to have terminated providers enrolled in their Medicaid programs; (5) safeguard Medicaid from inappropriate payments associated with terminated providers; and (6) review states’ contracts with MCOs to ensure that they clearly and specifically include the required provision that prohibits terminated providers from participating in Medicaid managed care networks.

CMS Response. CMS concurred with all six of the OIG’s recommendations and described steps to implement them.

ReportsLetters: OIGReports AgencyNews MedicaidNews ProviderPaymentNews ProgramIntegrityNews NewsFeed

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