GAO to Congress: CMS needs to do more to prevent Medicaid fraud

Despite policy changes that strengthen provider enrollment screening and require states to electronically verify Medicaid beneficiary eligibility, the Centers for Medicare & Medicaid Services (CMS) needs to do more to prevent millions in improper payments to both beneficiaries and providers, according to recent testimony by Seto Bagdoyan, director of forensic audits and investigative service at the Government Accountability Office (GAO).

Bagdoyan's testimony before the House of Representatives Subcommittee on Oversight and Investigations highlighted findings from a report released at the end of May that uncovered millions in improper payments in 2011.

GAO investigators reviewed Medicaid data in Arizona, Florida, Michigan and New Jersey--states with high Medicaid enrollment and reliable data--and found that Medicaid paid at least $18.3 million in concurrent payments to 8,600 beneficiaries in two or more states. Additionally, approximately 200 deceased beneficiaries received $9.6 million, and 3,600 incarcerated individuals received $4.2 million.

Medicaid beneficiaries weren't the only ones linked to improper payments. The GAO also found that Medicaid made payments to approximately 90 providers with a revoked license, totaling $2.8 million.

In his testimony, Bagdoyan pointed to efforts CMS has made in recent years to combat improper payments. Beginning in October 2013, states were required to use a federally maintained electronic database to verify beneficiary eligibility. Two years prior, CMS mandated improved provider enrollment screening, allowing states to use Medicare's Provider Enrollment, Chain and Ownership System (PECOS).

However, gaps in these regulatory changes have minimized their impact. For example, states are only required to search Medicaid beneficiary files for deceased individuals once a year. Additionally, states are not required to use the Social Security Administration's Death Master File during that process. Provider enrollment screening has been limited, states say, because CMS does not allow full access to the PECOS database. Providers cannot correct or clarify PECOS data, FierceHealthcare previously reported.

"Based on these concerns, we recommended that CMS issue guidance to states to better identify beneficiaries who are deceased and provide states with additional information from PECOS," Bagdoyan said in his testimony. "The Department of Health and Human Services concurred with both recommendations and stated it would provide state-specific guidance to address them."

The GAO has frequently criticized CMS for its failure to prevent waste and abuse among government health programs. Both Medicaid and Medicare have long been staples of GAO's list of high risk federal programs, FierceHealthPayer: AntiFraud previously reported, contributing more than $125 billion in improper payments.

In January, George Mason researchers found that Medicare and Medicaid budgets were too big to control, with improper spending in those programs amounting to as much as 20 percent of the federal budget. In March, a GAO report called on CMS to strengthen its oversight of state anti-fraud efforts.

For more:
- here's Bagdoyan's testimony (.pdf)
- read the GAO report (.pdf)

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