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OIG’s Testimony Emphasizes Preventing, Detecting, and Enforcing Improper Payments

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently testified to the House Committee on Oversight and Government Reform regarding Medicaid program integrity. Medicaid represents one-sixth of the national healthcare economy and served over 69 million enrollees in fiscal year (FY) 2016. The OIG estimated that over $36 billion of the $574 billion total Medicaid program expenditures in FY 2016 were improper payments. The OIG’s testimony focused on collecting complete and accurate national data to prevent improper Medicaid payments. Further, the testimony called upon the Centers for Medicare & Medicaid Services (CMS) to take steps to improve Medicaid program integrity. The OIG emphasized its own key principles of prevention, detection, and enforcement as a means of combating improper payments.

The OIG previously found that many states had not yet completed fingerprint‐based criminal background checks and provider site visits. As a result, state Medicaid programs ran the risk of making payments to “bad actors” that wrongfully entered Medicaid and caused beneficiaries to be vulnerable to abuse and neglect. The OIG specifically expressed concern with regard to the minimal screening activities undertaken for Medicaid personal care services (PCS) providers. Although CMS has been assisting states with screening, the OIG noted that CMS continues to extend the deadline for states to implement safeguards surrounding criminal background checks, thereby prolonging the process.

Summary of OIG’s Testimony Regarding Improper Medicaid Payments

The OIG also testified that Medicaid could avoid making improper payments by using data system functionality to determine program eligibility. Recent OIG reviews revealed that states were incorrectly determining Medicaid beneficiary eligibility, with several states failing to comply with federal and state requirements to verify income, citizenship, and identity. Enrollment data system errors partly contributed to the problem, as systems lacked the ability to deny or terminate ineligible beneficiaries, and properly re-determine eligibility when a beneficiary aged out of an eligibility group. Some systems also failed to maintain records of eligibility determinations and verifications, and could not retrieve or use relevant information from other government databases.

The OIG’s testimony emphasized the importance of using data to detect “bad actors” and related problems in real time. The OIG noted that the lack of complete and reliable Medicaid data hinders the ability to detect improper payments, fraud, waste, and quality concerns at the state and national levels. The Transformed Medicaid Statistical Information System (T‐MSIS) is a joint effort between CMS and the states, whereby states submit data to create a national Medicaid dataset. Although 49 states and the District of Columbia have begun reporting T-MSIS data as of March 2018, the system has not been fully implemented. Without a comprehensive dataset, states will not effectively be able to recognize fraud schemes or identify improper utilization or spending problems across state lines. Previous OIG reviews also found that Medicaid managed care encounter data were incomplete due to the inability to collect encounter data from managed care entities. The OIG advised that CMS and states must make full implementation, completeness, and reliability of T‐MSIS data a top priority to detect fraudulent and harmful providers.

Further, the OIG called for complete and comparable national Medicaid data across the states to aid in enforcement efforts, and to keep fraudulent and harmful providers out of the program. In July 2017, the OIG conducted the largest National Health Care Fraud takedown in history and emphasized that the availability of sophisticated data analytics was critical to the takedown’s success. The OIG testified that such a level of data analysis could not be replicated in Medicaid, due to the lack of complete and reliable data across states.

Based on the findings outlined in the testimony, the OIG recommended that CMS:

  • Collaborate with states to develop and implement fingerprint-based criminal background checks and site visits for high-risk providers;
  • Set forth minimum qualifications and screening standards for all Medicaid PCS attendants;
  • Issue a deadline for when it will make national T-MSIS data available for program integrity efforts across several states; and
  • Take steps to ensure that states report encounter data for all managed care entities.

The OIG further recommended that individual states take the following actions:

  • Ensure that enrollment data systems can verify eligibility criteria;
  • Develop and implement policies and procedures to address vulnerabilities in determining beneficiary eligibility; and
  • Initiate Medicaid eligibility redeterminations as soon as possible.

The complete testimony is available at:

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