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OIG Testimony Before Congressional Subcommittee Outlines Inadequacies of Medicaid Integrity Programs

On June 7, 2012, Ann Maxwell, Regional Inspector General, Office of Evaluation and Inspections, Office of Inspector General (OIG), Department of Health and Human Services (HHS), testified before the U.S. House of Representatives Committee on Oversight and Government Reform: Subcommittee on Government Organization, Efficiency and Financial Management. She testified about an OIG assessment of Medicaid program integrity, which concluded that more needs to be done to protect the integrity of Medicaid payments.

The testimony focused on two national Medicaid integrity programs: the Centers for Medicare and Medicaid Services’ (CMS) National Medicaid Audit Program, and the Medicare-Medicaid Data Match Program (Medi-Medi). The National Medicaid audit program consists of two types of Medicaid Integrity Contractors (MIC), Review MICs and Audit MICs. Review MICs conduct data mining and Audit MICs conduct audits of specific providers. The Medi-Medi program joins together CMS and State and Federal agencies to collaborate and analyze billing trends to identify potential fraud, waste, and abuse. OIG assessment of the programs, as outlined in the testimony, indicates that neither program is effectively accomplishing its mission.

The OIG concluded that the National Medicaid Audit program did not identify overpayments in an amount to prevent a negative return on investment. In fiscal year 2010, CMS paid MICs $32.1 million, while the Audit MICs identified only $6.9 million in the first six months of the year. The Medi-Medi Program also yielded a negative return on investment, recovering $57.8 million in 2007 and 2008, while CMS spent $60 million on the program during the same period.

During the period of OIG review, the National Medicaid Audit Program Review MICs did not produce any potential fraud leads for referral to law enforcement, and CMS did not have a formalized process for Review MICs to identify potential leads. CMS has now implemented a formalized process.

Also during the OIG review period, Review MICs did not complete all of the required tasks for which they were contracted. Along with other tasks Review MICs are contracted to perform, they must provide or recommend audit leads to CMS. Review MICs provided no audit leads during the review period, and CMS stated that it did not expect them to provide audit leads.

Ms. Maxwell’s testimony included OIG recommendations to CMS to improve the efficiency and effectiveness of Medicaid programs. These recommendations include:

• Devote the resources necessary to improve the quality of the Medicaid data available to conduct national Medicaid program integrity data analysis and mining.
• Improve the ability of contractors to properly analyze Medicaid data in light of state-specific policies.
• Evaluate the goals, design, and operations of Medicaid programs to determine what aspects should be a part of a national Medicaid program integrity strategy.
• Hold contractors responsible for all tasks outlined in their contracts.

If you have any questions about Medicaid or Medicare audits, or need help implementing a compliance plan, please contact an experienced healthcare attorney at Wachler & Associates at 248-544-0888.