Federal government needs to boost Medicaid managed care oversight, GAO says

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The government's oversight of Medicaid managed care organizations is not strong, even though these entities cover about 50 million people and are growing rapidly, according to a recently released report from a watchdog agency.

Long-term care stakeholders are grappling with the swift growth of managed care, in which private health plans administer benefits. These managed care organizations (MCOs) are going largely unsupervised, as the federal government continues to focus mainly on fee-for-service, a Government Accountability Office investigation determined.

In addition, federal agencies have largely delegated managed care oversight to the states but have failed to provide needed guidelines and resources.

The Centers for Medicare & Medicaid Services has not updated program integrity guidance since 2000 and does not require states to audit managed care payments, while state officials believe they need more assistance from contracted auditors to ensure program integrity, according to the GAO report released Wednesday.

Furthermore, the patchwork of organizations doing managed care post-payment reviews, audits and investigations might be creating a fragmented system that does not catch improper payments to providers, the report stated.

CMS agreed with most recommendations in the report, but said the recommendation to require audits of payments from states to managed care organizations and from managed care organizations to providers is “unclear." States have an established system for auditing payments to MCOs, and state Medicaid agencies have the authority to ensure MCOs are making appropriate payments to providers under their agreements, according to CMS.

Sen. Orrin Hatch (R-UT) requested the report, and he urged CMS to adopt the recommendations. He noted that the Affordable Care Act gave states the option to expand their Medicaid programs, and many are doing so through managed care systems.

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