Audit Program Charged with Uncovering Medicaid Waste Found to be Wasteful

The Medicaid Integrity Group, a department charged with making sure that Medicaid funds are spent with minimal waste, turns out to be a function that contains redundancy and waste, according to the Congress’s Government Accountability Office.

The Medicaid Integrity Group’s Nation Medicaid Audit Program (NMFA), which snoops out waste and fraud in state Medicaid programs, consumes more than half of the budget of the Medicaid Integrity Group, the GAO reports.

Earlier this week the GAO released an investigation of the audit program, calling for the following reforms:

Merge review and audit contractor functions to eliminate redundancy.

The GAO found that “the Medicaid Integrity Group’s (MIG) hiring of separate review and audit contractors for its National Medicaid Audit Program (NMAP) was inefficient and led to duplication because key functions were performed by both entities,” the report states. While the objectives fo the two contractors are different — review contractors analyze state claims data in search of “aberrant claims or billing anomalies” while audit contractors audit payments already made — their investigations frequently overlap, thereby doubling the burden upon states.

Employ comprehensive reviews to better target audits and reduce duration.

The GAO found that audits of state Medicaid programs took almost two years on average to complete when conducted by audit contractors, but when audit contractors coordinated with review contractors (who would perform data analysis, for example), the duration was cut to 16 months and more overpayments were uncovered.

Follow up with states to ensure reliable reporting of their program integrity recoveries.

The GAO found that the free training provided to state officials through the Medicaid Integrity Institute, the evaluation of state program integrity procedures through triennial comprehensive reviews, and the collection of data from states through annual assessments failed to demonstrate consistent benefits toward program integrity.

Discontinue the state program integrity assessments (SPIA).

The GAO investigation revealed that data collected through the assessments is the same data collected more accurately and up-to-date from other reporting activities.

Reevaluate and publish the Medicaid Integrity Program’s return on investment (ROI) methodology.

“CMS’s annual reports to Congress provide a limited picture of ROI for NMAP audits,” the GAO found. Every year the program publishes how much it recovered as a result of its audit activities, but according to the GAO, it is unclear how the Centers for Medicare and Medicaid Services calculate those figures and the resulting ROI.

The complete GAO report can be downloaded here:  (You must be logged in to download this file. Don't have an account? Register for free and you'll be returned to this page.)

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