Eighty-one percent of pre-screened audits undertaken in the CMS' first comprehensive effort to fight waste, fraud and abuse in Medicaid were either unable or unlikely to identify overpayments during a recent six-month period, according to an analysis by HHS' inspector general.
Most early MIC audits had trouble finding overpayments, analysis finds
The analysis found only 11% of assigned audits conducted Jan. 1 and June 30, 2010, by Medicaid Integrity Contractors were completed and $6.9 million in overpayments.
Among the reasons the contractors were unable to find overpayments among providers previously identified as likely to have received such excess funds was due to the use of audit algorithms previously found ineffective.
“The 109 audit targets were selected using the same algorithms in the same states as other completed audits that primarily had findings of no overpayments,” the inspector general's report stated.
Mistakes in the data and by the contractors that selected the providers to receive audit—based on their likelihood to receive overpayments—also were blamed for the lack of overpayment findings.
The inspector general's report recommended the CMS increase its use of audits coordinated with each state's Medicaid officials. Seven of the 42 audits that found overpayments were coordinated with state Medicaid officials and those found $6.2 million of the $6.9 million total.
“Identifying improper payments in Medicaid requires indepth knowledge of each state's Medicaid program policies and data,” the report stated. “Medicaid is administered by states, and each state's Medicaid program is unique.”
The contractors said such coordination with the states was complicated in the past because all communications were required to go through the CMS, but the agency has since changed its policies to allow direct communication.
The CMS spent $17.2 million on all such contractors in fiscal 2010.
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