WASHINGTON, DC - A new report by the nonpartisan Government Accountability Office (GAO) is making recommendations that the Centers for Medicare & Medicaid Services (CMS) take action to help address improper payments in the Medicaid program.
The report, which was requested by the committee, found that CMS’ current efforts to accurately estimate the improper payment rate for Medicaid managed care payments do not account for overpayments and unallowable costs. GAO found that the managed care component of the Payment Error Rate Measurement (PERM) review only measures capitated payments, and therefore does not account for all of the program integrity risks within Medicaid managed care.
Specifically, GAO states, “Ten of the 27 federal and state audits and investigations identified about $68 million in overpayments and unallowable MCO [managed care organizations] costs that were not accounted for by PERM estimates; another of these investigations resulted in a $137.5 million settlement. These audits and investigations were conducted over more than five years and involved a small fraction of the more than 270 MCOs operating nationwide as of September 2017."
GAO recommended CMS take additional action to account for the types of improper payments not accounted for in their PERM estimates. The Department of Health and Human Services agreed with the recommendation.
“These are important programs with limited resources, and it is imperative they are maximizing every dollar," said Energy and Commerce Committee Chairman Greg Walden (R-OR). “Updating their error measurement tracking will be an important tool in reducing the amount of improper payments in the Medicaid program, allowing CMS to focus on their beneficiaries and the care they need."
Energy and Commerce has a long track record of examining improper payments across the Medicare and Medicaid programs. Those efforts include other GAO requested work, and several hearings before #SubOversight.
