CMS needs to better oversee managed Medicaid programs, GAO says

The CMS isn't doing enough to ensure that states are adequately paying managed Medicaid companies and that the plans are making correct payments to providers, according to a U.S. Government Accountability Office report released Thursday.

Medicaid enrollment in managed care increased by 56% from 2013 to 2016, jumping from covering 35 million beneficiaries to 54.6 million beneficiaries. Federal spending on services paid for under Medicaid managed care was $171 billion in 2017, almost half of the total federal Medicaid expenditures for that year.

But the CMS doesn't have a process to track overpayments in managed care or determine whether states considered those overpayments when they set capitation rates, the GAO said.

"This lack of knowledge is of particular concern, given the recent rapid growth in enrollment in Medicaid managed care," the report said.

The CMS attempted to ramp up oversight of managed-care companies via a mega rulemaking in 2016. Last spring, the CMS told GAO additional guidance around audit procedures and program integrity were also forthcoming, but they've yet to be released.

"Until such guidance is issued, stakeholders' ability to effectively address challenges to payment risks in Medicaid managed care will continue to be hindered," the GAO said.

The GAO recommended the CMS expedite release of the planned guidances and require states to report to the CMS overpayments made between managed-care providers and plans .

Last month, the GAO released a related report that found $68 million in managed-care overpayments to providers. The data was based on audits and investigations of Medicaid managed-care programs conducted by the agency.

The CMS concurred with GAO's recommendations and said it's already improving oversight of the Medicaid program with training through the Medicaid Integrity Institute overseen by the U.S. Justice Department.

Jeff Myers, chief executive of Medicaid Health Plans of America, argued that there is strong oversight of plans and said any indication otherwise is based on data prior to implementation of the 2016 rulemaking.

He also noted that this new report is based on analysis by stakeholders and expert interviews and not empirical data to show there are significant problems with managed-care oversight.

"In our view, these are the issues that the Medicaid rule was addressing," Myers said. "I don't read a lot into this other than a bunch of experts saying hypothetically these things can happen."