In health care, the current mantra is that nobody does it better than the federal government. Except, it seems, when it comes to auditing the Medicaid program.
Over the last 5 years, the federal Medicaid Integrity Group (MIG) paid at least $102 million to contractors that it hired to audit Medicaid. According to a June, 2012, report from the GAO, CMS spent $120 million to uncover less than $20 million in possible Medicaid overpayments.
For every $6 spent, there is at least a potential of getting $1 back.
Officials from several states said that federal contractors used audit algorithms that were identical to or less sophisticated than the algorithms they were already using. One official said that a federal contractor went ahead and duplicated state efforts even after it was informed that it was doing so. In another case, a contractor identified overpayment to federally qualified health centers because it assumed that payments should be lower for an established payment in subsequent visits. The contractor may have been confusing Medicaid with Medicare. Medicare has separate codes, and reimbursement rates, for new and established patients. In this case, the federally qualified health centers used the same Medicaid payment rates for all visits.
The contractor audits used CMS Medicaid Statistical Information System data rather than the states’ more robust Medicaid Management Information claims data. There were 1,550 audits using the CMS data set. They identified only $7.4 million in overpayments. The 32 audits using the more detailed data in the state data sets led to the identification of the additional $12 million in possible overpayments.
The GAO numbers suggest that this program had an annualized rate of return roughly approaching that of the Cash for Clunkers program, although the CMS has not quantified how much money was actually recovered.
Despite losing about $100 million on this part of the program, the Department of Health and Human Services claims that the Medicaid Integrity Program had a positive return on investment overall. But HHS reporting is so murky that GAO notes that the truth of this statement cannot be independently assessed. In its opinion, CMS failed to clearly describe its reporting metrics.
“In health care, the current mantra is that nobody does it better than the federal government”
– It’s hard to imagine many people verifying that statement.
Waste in tracking down waste, typical.
seems to be the M.O. for Medicaid
Good work, Linda. I’m not surprised by the results.
Well, I think what everyone agrees is administration costs are cheaper when administered by government, about 7% of cost (pre-Bush) compared to 30% for private
And here’s the problem with these two statements paired together. It was cheaper to administer before the Bush administration privatized the administration. Note the word “contractors”, that means this has been privatized, and is likely the source of the excess cost.
That seems like an atrociously low rate of return.
That’s interesting. The NCPA did a study about 10 years ago which found out that state run healthcare spent about 4 times as much as private insurance. The VA is a great example.
Only difference is that the VA Office of the Inspector General has no problem rooting out misallocations, inefficiencies, and fraud.
“The contractor may have been confusing Medicaid with Medicare”…and these are the people we rely on to inspect Medicaid’s numbers. Scary.
Seems like the GAO never succedes at preventing abuse/waste/fraud…just lets us know once the bank has been plundered.