Deeper Than the Headlines: OIG Testimony on Medicaid Fraud and Overpayments

The notorious OIG has visited Capitol Hill again. This time, to testify before a U.S. Senate committee on Medicaid Fraud and Overpayments.

On June 27, 2018, Brian P. Ritchie, Assistant Inspector General for Audit Services within the OIG, gave testament of the various problems and possible solutions regarding Medicaid fraud and overpayments.

There are 67 million Medicaid beneficiaries and an annual price tag of $600 Billion. Medicaid spending represents one‐sixth of the national healthcare economy, and Medicaid serves more people–including some of the nation’s most vulnerable individuals–than any other Federal healthcare program. That’s saying a lot. In FY 2017, projected improper Medicaid payments totaled about $59 billion.

National Medicaid Data Set

One concern shared by Mr. Ritchie is the lack of a national Medicaid data set which hampers the government’s ability to quickly detect and address improper payments, fraud, waste, or quality concerns, both within states and across the nation. Complete and reliable national Medicaid data are necessary for effective program oversight and management and to detect bad actors. The ability to detect problems in real time, or as close to real time as possible, enables effective oversight and can protect patients and help prevent improper payments. CMS, States, Medicaid managed care entities, and providers share the responsibility for detecting and addressing problems in the Medicaid program.

Through the Balanced Budget Act of 1997, Congress mandated that states submit data to provide for a national Medicaid dataset. The Transformed Medicaid Statistical Information System (T-MSIS) is a joint effort by CMS and the states to address previously identified problems with national Medicaid claims and eligibility data. CMS’s goals for T-MSIS are to improve the completeness, accuracy, and timeliness of Medicaid data. As of May 2018, 49 states (all states except Wisconsin) and the District of Columbia had begun reporting data to T-MSIS, but concerns remain about the quality and completeness of the data reported.

OIG is concerned about whether the data will be actionable, as their work has identified numerous issues with the completeness and quality of the data. They found that states are not consistently submitting the same T-MSIS data elements, limiting the ability to make comparisons across all states. Despite CMS’s attempts to further standardize meaning through a revised standard data dictionary, T-MSIS data elements may not mean the same thing across states. Different interpretations across states could result in data that is not comparable across different states.

OIG recommends that CMS establish a deadline for when national T-MSIS data will be available for multi-state program integrity efforts. Without the prioritization motivated by a fixed deadline, some states and CMS may delay full implementation of T-MSIS to the detriment of Medicaid program integrity.

Reducing Improper Payments

Another area highlighted by Mr. Ritchie was the importance of reducing improper payments to providers.

In FY 2017, HHS reported a Medicaid improper payment rate of 10.1 percent. CMS has engaged with State Medicaid agencies to develop corrective action plans that address State-specific reasons for improper payments as a part of CMS’s Payment Error Rate Measurement program, which measures Medicaid improper payments. CMS has facilitated national best practices calls to share ideas across States, provided State education through the Medicaid Integrity Institute, offered ongoing technical assistance, and provided additional guidance as needed to address the root causes of improper payments.

OIG audits have identified substantial improper payments to providers across a variety of Medicaid services, including school-based services, nonemergency medical transportation, targeted case management services, and personal care services. OIG has also identified several states that made improper payments to Medicaid managed care entities. More specifically, OIG found that several states made monthly capitated payments on behalf of deceased Medicaid beneficiaries, and identified several states that made duplicate monthly capitated payments for the same beneficiary.

CMS should continue to engage with State Medicaid agencies to develop corrective action plans and provide specific guidance to states regarding services and benefits most vulnerable to improper payments. OIG audits have identified billions of dollars in Medicaid overpayments that states should pay back. OIG has conducted extensive work looking at how much of this money CMS has collected. One OIG study found that CMS had collected about 80 percent of $1.2 billion in Medicaid overpayments identified in certain audits. OIG plans continued work in this area to ensure the program effectively reclaims overpayments.

Other areas discussed by Mr. Ritchie in his testimony included overpayments for prescription drugs, quality of care, group homes and Medicaid Fraud Control Units (MFCUs). Compliance officers would be wise to read the testimony in its entirety, especially if their organizations serve the Medicaid population.