Policy and Regulation News

CMS to Develop New Medicaid Program Integrity Initiatives

CMS Administrator Seema Verma announced new Medicaid program integrity initiatives to address improper payments and Medicaid fraud.

CMS develops new Medicaid integrity initiatives.

Source: Thinkstock

By Thomas Beaton

- CMS has announced a new set of Medicaid program integrity initiatives that leverage enhanced data sharing, claims auditing, and provider education to reduce the incidence of improper payments and help secure program finances.

In 2016, Medicaid spending in the US reached $567 billion, with the federal government paying $363 billion of that total, says a CMS press release.

With so much money at stake, CMS Administrator Seema Verma stated that both the federal government and the states administering Medicaid programs need to be held accountable for program integrity, and must take further actions to address improper payments.

“The initiatives released today are essential to help strengthen and preserve the foundation of the program for the millions of Americans who depend on Medicaid’s safety net. With historic growth in Medicaid comes an urgent federal responsibility to ensure sound fiscal stewardship and oversight of the program,” Verma said.

“These initiatives are the vital steps necessary to respond to Medicaid’s evolving landscape and fulfill our responsibility to beneficiaries and taxpayers.”

CMS will audit some states based on their medical loss ratios (MLR), according to CMS’s new action plan.

CMS will compare how much states spend on clinical and quality improvements with states’ expenditures on administration and their profits. The audits address concerns presented by the Government Accountability Office about variations in state spending, CMS said.

“Beneficiaries depend on Medicaid and CMS is accountable for the program’s long-term viability. 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,” Verma added.

The initiatives include a plan to audit state beneficiary eligibility determinations to see if state Medicaid programs are effectively enforcing eligibility rules. CMS will use eligibility audits to determine future disallowances for state Medicaid programs that do a poor job of enforcing Medicaid eligibility.

“These audits will include assessing the effect of Medicaid expansion and its enhanced federal match rate on state eligibility policy,” CMS said. “Current regulations will allow CMS to begin to issue potential disallowances to states in 2022.”

To deter fraud and prevent improper payments, all US states, the District of Columbia, and Puerto Rico will now submit Medicaid program data to CMS’s Transformed Medicaid Statistical Information System (TMSIS). CMS will continue to update and validate TMSIS data and eventually use the data for advanced analytics purposes.

“This will allow CMS to identify instances like a beneficiary receiving more hours of treatment than hours in a day or other flags that necessitate further investigation,” CMS said.

In addition, CMS plans to leverage Medicaid data to pilot analytics projects at the state level, screen Medicaid providers for eligibility, and update public-facing Medicaid scorecards.

CMS’s program integrity updates follow other efforts by policymakers to encourage updates to CMS initiatives, particularly around improper payments.  

Senators representing the Senate Budget Committee recently urged HHS Secretary Alex Azar to address $89 billion in improper payments in both Medicare and Medicaid. The Senators also advised Azar that limiting improper payments in CMS programs could help Medicare remain financially solvent in light of spending concerns.