With 72% of all Medicaid recipients now having private companies instead of states managing their care, the CMS and HHS' office of inspector general say it's time to update the 11-year-old rules on preventing fraud and abuse in that area.
Update of Medicaid fraud rules recommended
That was the finding from an audit of state Medicaid managed-care contractors (PDF) released by the HHS office of inspector general (OIG). However, CMS officials said they were already working on such an update and plan to release draft proposals by the end of September 2012.
Because of soaring Medicaid costs, most states enroll at least part, if not all, of their public health-insurance populations in managed care, which allows private contractors to monitor services and review claims for payment. States then pay the private companies for Medicaid services on a predictable per-beneficiary, or capitated, basis.
Officials with the inspector general said capitated arrangements can create fraud and abuse risks, such as the incentive for Medicaid contractors to deny needed services or treat only healthier patients. The audit quoted the Florida office of inspector general in particular as emphasizing “the need to recognize the distinctively different issues in fraud detection and prevention in a capitated environment versus the traditional fee-for-service environment.”
The audit noted that both states and managed-care contractors appeared focused on the more traditional kind of fraud found in fee-for-service arrangements, in which services are billed but never rendered. The inspector general recommended, and the CMS agreed, that federal rules should be clarified so that beneficiaries are contacted directly to verify billed services were delivered.
But more broadly, OIG recommended—and the CMS again concurred—that fraud and abuse protections should be expanded, using the concern about such “claims submission and billing procedures” as a starting point.
The CMS' Guidelines for Addressing Fraud and Abuse in Medicaid Managed Care (PDF) from the year 2000 lists six areas that should be monitored, including claims fraud but also underutilization of services and marketing and enrollment.
The Oct. 26 response to the OIG audit from now-former CMS Administrator Dr. Donald Berwick revealed that agency is already revising the guidelines, with the expectation of a new draft being released by the end of fiscal 2012.
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