Federal auditors are calling on the Medicaid program to withhold money from states that don’t provide complete information on managed care companies.
The recommendation from the Department of Health and Human Service’s Office of the Inspector General (OIG) comes after an audit found that at least 26 states had committed reporting errors when submitting managed care treatment data to the Centers for Medicare & Medicaid Services. The errors included incomplete information, missing identifiers, and missed deadlines.
“The high proportion of beneficiaries enrolled in managed care makes accurate encounter data essential for the oversight of Medicaid as well as prevention of fraud, waste, and abuse,” OIG auditors said in a July 6 report.
OIG auditors reviewed claim files from fiscal year 2011 in the Medicaid Statistical Information System (MSIS), a national database in which states must submit managed care encounter data. Medicaid managed care programs deliver health services through contracted arrangements between state Medicaid agencies and managed care entities. In 2013, 70% of the 55 million Medicaid patients nationwide were enrolled in managed care programs, according to the report.
The OIG examined encounter information from 38 states. Auditors found eight of the states did not report encounter data from any managed care entities by the required deadline. Eleven states did not report encounter data for all managed care entities. An additional seven states submitted information with missing fields and invalid identifiers that precluded the OIG from verifying the status of encounter data. Past OIG audits have also raised concerns about the completeness, timeliness, and accuracy of national Medicaid data. In a 2009 report, OIG found that 15 states did not report encounter data to the MSIS.
OIG recommended that CMS withhold federal funds from states that fail to submit encounter data to the MSIS until the data is reported. CMS should also monitor encounter data to ensure information is reported for all managed care entities, OIG recommended.
The Affordable Care Act gives CMS the authority to withhold federal Medicaid matching funds from states that fail to provide proper encounter data to the national database. However, rules for implementing the ACA provision have not been finalized, and as a result, CMS has not exercised its authority to withhold funds. In June, CMS issued a “notice of proposed rule-making” that would authorize the withholding of federal funds.
CMS agreed with both OIG recommendations, according to the OIG’s report. The agency stated that it will continue to work with states to ensure that managed care programs submit timely encounter data to states, that data is complete, and that information includes valid fields.
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