Wednesday, July 18, 2018

OIG Finds Weaknesses in Medicaid Managed Care Organizations’ Efforts To Identify and Address Fraud and Abuse

Narda Ipakchi

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) released a report finding weaknesses in Medicaid managed care organization (MCO) efforts to identify and address fraud and abuse. The report is based on a survey requesting 2015 data from the largest MCO (by expenditures) in 38 states as well as interviews with select MCO and state officials. Key findings include: (1) some MCO’s identified and referred few cases of suspected fraud or abuse in 2015; (2) not all MCOs used proactive data analysis; (3) MCOs did not typically inform states when acting against providers suspected of fraud or abuse; and (4) MCOs did not always identify and recover overpayments. The OIG concluded that the weaknesses it identified “suggest that MCOs need additional incentives to identify and refer cases and identify and recover overpayments.”

The OIG issued 8 recommendations for action by the Centers for Medicare & Medicaid Services (CMS), working with states, to: “(1) improve MCO identification and referral of cases of suspected fraud or abuse, (2) increase MCO reporting to the State of corrective actions taken against providers suspected of fraud or abuse, (3) clarify the information MCOs are required to report regarding providers that are terminated or otherwise leave the MCO network, (4) identify and share best practices about payment-retention policies and incentives to increase recoveries, (5) improve coordination between MCOs and other State program integrity entities, (6) standardize reporting of referrals across all MCOs in the State, (7) ensure that MCOs provide complete, accurate, and timely encounter data, and (8) monitor encounter data and impose penalties on States for submitting inaccurate or incomplete encounter data.”

CMS concurred with all recommendations except recommendation #6 regarding standardized reporting of referrals. CMS emphasized the need for state flexibility to determine if standardization would be effective in the state. The OIG countered that it “continues to support working with States to develop a standardized template for MCOs, which can reduce provider burden and improve the quality and consistency of referrals.”

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