CMS still hasn’t recouped $1.8B in Medicaid overpayments identified in OIG audits

A dollar sign created by Monopoly game houses is surrounded by Monopoly money. Dice and the car token appear next to the dollar sign as well.
CMS still hasn't collected half of the overpayments identified by OIG over more than a decade. (Getty Images/martince2)

The Centers for Medicare & Medicaid Services (CMS) has failed to recover more than half of the nearly $3 billion in Medicaid overpayments identified by auditors over an 11-year period.

The main reason for the delay is that the agency’s policy does not include timelines for resolving overpayments when state agencies disagree with auditors’ findings.

All told, the Office of Inspector General (OIG) identified $2.7 billion in Medicaid overpayments in 313 audits issued between 2010 and 2015, and $225.6 million in 10 audits between 2004 and 2009. As of December, CMS hadn’t collected $1.8 billion of those payments, according to an OIG report (PDF) issued this week.

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“CMS’s prompt recovery of overpayments helps ensure that federal funds are effectively and efficiently used to carry out the activities for which they are authorized,” the OIG wrote.  “CMS’s failure to collect and states’ failure to pay illustrate a significant financial stewardship vulnerability.”

CMS concurred with the OIG’s recommendations that it recoup the funding and ensure states are reporting overpayment recoveries correctly. CMS added that it is exploring options to improve the timeliness of discussions with state officials and obtaining documentation.

A earlier report from the OIG found Medicaid insurers often fail to catch or report instances of suspected fraud, with one-third of plans referred fewer than ten cases in 2015.

In 2017, Medicaid improper payments reached $37 billion, up from $29 billion in 2015, according to a report by the Government Accountability Office.

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