CMS is failing to ensure that terminated skilled nursing facilities and other providers are not billing Medicaid, watchdog agency says

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The Centers for Medicare & Medicaid Services needs to do a better job of ensuring that terminated Medicaid providers in a particular state, including skilled nursing facilities, don't reappear in another state, according to a new government report.

Under the Affordable Care Act, CMS established a database to enable federal regulators and state Medicaid agencies to share information about providers terminated “for cause” — for example, due to fraud.

This database has been updated in a woefully inadequate manner, according to a report released Thursday by the Department of Health and Human Services Office of Inspector General (OIG).

The database contained no entries from 17 states and the District of Columbia as of June 1, 2013, the OIG found. Furthermore, many of the entries refer to providers that were not terminated for cause but for other reasons, such as deceased physicians. Many of the data fields were incomplete, and crucial information such as the provider identification number frequently was missing.

Only two skilled nursing facilities were entered into the system as being terminated, the OIG report shows. A variety of provider types also had an unrealistically low number of entries, which might be in part because states are overusing the “other” provider designation. More than 1,200 records listed provider type as “other,” according to the report.

The report does not include any numbers as to how many terminated providers still might be receiving Medicaid payments, but the implication is that many could be. Without reliable interstate data, a provider conceivably could be terminated in one state but continue to bill Medicaid in another.

CMS should require each state's Medicaid agency to report all terminated providers in the database and see that more complete data is furnished, the OIG recommended. The Medicaid agency concurred with all recommendations.