Editor’s note: This article has been republished with permission from the author, Steven Porter, HealthLeaders Media.
While touting the need for partnership between states and the federal government, the Centers for Medicare & Medicaid Services announced Tuesday that it will carry out a slate of strategies to keep state Medicaid programs from overspending.
The plan calls for eight "new or enhanced" initiatives—including audits targeting certain state programs and certain known vulnerabilities—on top of 10 initiatives already underway, according to the CMS announcement. The stated aim is to promote transparency and accountability.
"As we give states the flexibility they need to make Medicaid work best in their communities, integrity and oversight must be at the forefront of our role," CMS Administrator Seema Verma said in a statement.
"Beneficiaries depend on Medicaid and CMS is accountable for the program's long-term viability," Verma added. "As today's initiatives show, we will use the tools we have to hold states accountable as we work with them to keep Medicaid sound and safeguarded for beneficiaries."
Medicaid spending has risen more than 26% in recent years, from $456 billion in 2013 to $576 billion in 2016, according to the CMS announcement. That uptick includes spending that resulted from states expanding their Medicaid programs under the Affordable Care Act.
The federal government has covered most of that increase, with its share rising 38%, from $263 billion to $363 billion, over the same three-year period.
Tuesday's announcement comes less than a week after U.S. Sen. Ron Johnson, R-Wisconsin, released a Senate Homeland Security and Governmental Affairs Committee report, saying Medicaid "doles out $37 billion a year of improper payments," an increase of 157% since 2013. But some see the report's conclusions as flawed.
Matt Salo, executive director for the National Association of Medicaid Directors, told HealthLeaders Media in an email that CMS seems to be "broadly repudiating the wild accusations found in that report." While constant vigilance is indispensable, there's no reason to believe Medicaid waste, fraud, or abuse has increased dramatically in recent years, he said.
Complying with federal regulations and submitting to federal financial audits should be and always has been part of "the package deal" that comes with a jointly run state-federal program such as Medicaid, he added.
Even so, the items CMS targets for auditing may not be as simple as they seem on the surface.
"A lot of the issues that they raise are legitimately complex issues," Salo said.
The eight new or updated items on the CMS to-do list for promoting transparency and accountability in the Medicaid program, according to a fact sheet released Tuesday, include the following:
- Targeted audits of certain state MCOs: Officials with CMS will review financial reports from managed care organizations for some states to ensure they match actual claims experience. The CMS fact sheet included a nod to the Medical Loss Ratio (MLR) as a risk-mitigation strategy. (It's important to remember, Salo said, that MLRs have proven especially "tricky" for health plans seeking to address social determinants of health. "If a plan pays for housing for the homeless or nutritious meals for diabetics, those things aren't admin or profit or overhead, but they're not medical either," he said.)
- New audits of beneficiary eligibility: States that have previously had their Medicaid beneficiary eligibility reviewed by the Health and Human Services Office of Inspector General will have their determinations reviewed by CMS. "These audits will include assessment of the impact of changes to state eligibility policy as a result of Medicaid expansion; for example, we will review whether beneficiaries were found eligible for the correct Medicaid eligibility category," the CMS fact sheet states.
- Claims and provider data optimization: In the coming months, CMS will validate the quality and completeness of state-provided data in the Transformed Medicaid Statistical Information System (TMSIS). The goal is to use data analytics and other techniques to improve data quality as a means to ensure program integrity by flagging potential problems that require further investigation.
- Data analytics pilots: In addition to running analytics on state-provided data, CMS will help states themselves use data analytics to identify areas that need additional investigation.
- Provider screening on an opt-in basis: The federal agency will pilot a plan to screen Medicaid providers on behalf of states. "Centralizing this process will improve efficiency and coordination across Medicare and Medicaid, reduce state and provider burden, and address one of the biggest sources of error as measured by the Payment Error Rate Measurement (PERM) program today," the fact sheet states.
- State-federal data sharing and collaboration: CMS is giving states access to the Social Security Administration's master file of death records to help with managing provider enrollment. The federal agency plans to pursue similar data-sharing collaborations with the states.
- Publicly report state performance: The Medicaid scorecard was released to show how well states perform on certain measures pertaining to their Medicaid programs. In the future, CMS says, this scorecard will include the state's "integrity performance measures," such as PERM. (Salo said he has concerns about using PERM to create disallowances because it's "a flawed process metric and an even more poorly correlated indicator of actual waste, fraud, and abuse.")
- Provider education to reduce improper payments: In an effort to reduce incorrect billing, CMS will bolster education efforts for Medicaid providers. This will include education targeting comparative billing reports and provider-facing tools currently in development.
The 10 initiatives already underway are listed on the CMS fact sheet.