A new report to Congress casts significant doubts on the integrity and effectiveness of information systems many state Medicaid programs use to process claims, and CMS has agreed with it its recommendation that they verify those systems when applying for Medicaid funds.

State Medicaid agencies should be required to measure and report to the federal government how well their electronic payment-integrity tools work, the Government Accountability Office concluded in its March 2 report

“The effectiveness of the states’ use of the systems for program integrity purposes is not known,” GAO analysts noted, adding that CMS does not require states to measure or report quantifiable benefits achieved as a result of using the systems.

The GAO analyzed Medicaid Management Information Systems in nine states and the Virgin Islands. What inspectors found was a wide variety of IT systems to support efforts to prevent and detect improper payments. Three state Medicaid programs were working on MMIS platforms that were more than 20 years old. Seven had performed some kind of upgrade or implemented ancillary programs with data analytics and decision support features to review multiple claims and flag billing patterns as potentially fraudulent, the report noted.

Seven states relying on existing MMIS systems designed around the fee-for-service Medicaid program also administer Medicaid managed care programs – “plans for which provider organizations are reimbursed based on a fixed amount each month,” the report found. One state actually administered Medicaid exclusively as managed care. 

Moreover, “five of the 10 states faced challenges with using systems for managed care program integrity,” the report added.

The report concluded that CMS and the states cannot be assured of the systems’ effectiveness in helping to prevent and detect improper payments unless they are able to identify and measure such benefits (i.e., money saved or recovered) that result from using MMISs and other systems.