CMS launches slate of initiatives aimed at curbing fraud, waste in Medicaid

Seema Verma speaking at press conference
The Centers for Medicare & Medicaid Services launched several projects to curb wasteful spending in Medicaid. (

The Centers for Medicare & Medicaid Services launched several initiatives on Tuesday aimed at cutting down on fraud and waste in Medicaid. 

The programs, Administrator Seema Verma told reporters at a briefing, are part of the third pillar of the agency's blueprint to reform Medicaid: a focus on integrity and accountability. 

CMS will conduct audits of state programs to assess whether Medicaid beneficiaries are enrolled in the correct eligibility tiers and ensure that programs are reporting accurate medical loss ratios, Verma said. It plans to begin those reviews this summer and will include both expansion and nonexpansion states. 

Verma said CMS will also audit private Medicaid managed care plans to ensure their reported medical costs match actual spending. 

"We have a responsibility to ensure that taxpayer dollars are only spent on those who are eligible," she said. 

RELATED: What CMS' Seema Verma says states should think about before applying for Medicaid waivers 

Through these audits, CMS can also evaluate whether states are receiving proper federal matching funds in Medicaid; these payments have increased significantly under the Affordable Care Act through expansions of the program and greater subsidies, Verma said. 

An April report from the Government Accountability Office found that improper Medicaid payments—including fraud—are on the rise, reaching $37 billion last year. The watchdog said CMS has failed to follow through on recommendations to cut down on fraud and improper payments.  

In addition to taking steps to identify and cut down on wasteful or fraudulent spending, CMS is planning to bolster its data-sharing programs with states, addressing other concerns raised by the GAO. All 50 states, Puerto Rico and the District of Columbia are now reporting data to the Transformed Medicaid Statistical Information System (T-MSIS), a database which allows CMS to look at Medicaid spending at the individual level. 

Verma said CMS will be evaluating the quality of the data that's been collected through T-MSIS, and then it intends to leverage that data set to allow states to better analyze and flag potential abuse or waste. 

RELATED: CMS unveils Medicaid/CHIP scorecard data but doesn't say what it'll do with it 

She said CMS also plans to offer better education to providers to avoid inaccurate billing and to clear up any misunderstandings they may have about how Medicaid works. "Providers may not understand what they're doing wrong," Verma said. 

The agency also wants to make it easier for states to screen providers for the Medicaid enrollment by creating a central hub for such approvals, as part of its ongoing efforts to ease administrative burdens. Verma said that providing these screenings through CMS takes something off of states' plates and will allow for simultaneous screening for other programs, like Medicare.