GAO: Managed Medicaid plans need better oversight
Medicaid managed care is far from perfect, with several integrity program risks, according to a recent report from the U.S. Government Accountability Office (GAO).
Medicaid managed care, which totaled $171 billion in federal spending in 2017, accounts for almost half of all Medicaid expenditures. But the program rarely focuses on payment risks—instead, emphasis has been placed on fee-for-service Medicaid, GAO found.
Furthermore, CMS's efforts to oversee managed care have achieved little success due to delays and gaps in oversight, according to GAO.
Managed care organizations (MCOs) that offer Medicaid managed care receive a periodic payment per beneficiary to provide healthcare services, with the potential to lower costs and better manage overall care services.
CMS issued a final rule in 2016 to enhance regulatory provisions related to program integrity and payment risks and has updated its requirements audits and reviews, but the efforts have been “incompetent,” GAO reported.
There have been delays in issuing guidance and gaps in key auditing and monitoring activities. Without guidance, stakeholders can’t effectively address payment risk challenges, GAO stated. In addition, just 14 of 762 audits initiated by CMS contractors between 2014 and 2017 were for managed care.
GAO found significant payment problems with three CMS managed care audits reviewed—one revealing 8.94 percent of an MCO’s payments were in error, equal to $4 million in overpayments in a six-month period. The audit also found a lack of provider complains related to preventive care service coverage and care coordination to members, as well as a lack of monitoring of member enrollment that led to the MCO paying providers for individuals who were not enrolled.
Audit contractor officials also lack access to MCO overage and policy materials, inhibiting their ability to do analysis on potential provider fraud, abuse and waste.
GAO found six types of payment risks associated with managed care–four risks related to payment from states to MCOs and two related to payments from MCOs to states.
Payment risks include:
• Improper state capitation payments
• Inaccurate state capitation rates
• State payments to noncompliant MCOs
• Duplicate state payments
• Incorrect MCO fee-for-service payments
• Incorrect MCO capitation payments
The risks, coupled with the gaps in monitoring overpayments, are more complex under managed care, and CMS needs to do more to address the potential problem areas, GAO concluded.
“CMS cannot be sure that states are holding MCOs financially accountable for making proper payments, that states are paying accurate capitation payments to MCOs, or that the federal government’s share of Medicaid expenditures is accurate,” the report reads.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."