WHY WE DID THIS STUDY
The 21st Century Cures Act (Cures Act) includes specific program integrity requirements to ensure that States do not spend Medicaid funds on items and services associated with terminated providers. In addition, as of July 1, 2018, the Cures Act requires State contracts with managed care organizations (MCOs) to include a provision that providers who were terminated from Medicare, Medicaid, or CHIP cannot participate in their Medicaid managed care networks. The Cures Act required OIG to determine the following: (1) whether providers in CMS’s termination database are terminated from Medicaid in all States, (2) the amount of Medicaid payments associated with terminated providers, (3) whether State contracts with MCOs included a required provision that prohibits providers terminated from Medicare, Medicaid, or CHIP from participating in Medicaid managed care networks, and (4) the amount of Medicaid payments to MCOs that did not have the required provision in their contracts.
HOW WE DID THIS STUDY
From CMS, we requested its termination database, which contains information on terminated providers reported by States. We requested rosters of enrolled providers from States. We reviewed State enrollment rosters dated between January and May 2019. We compared terminated providers listed in CMS’s February 2019 termination database to the providers in States’ rosters of enrolled Medicaid providers.
We also identified fee for service claims and managed care encounter records associated with terminated providers on or after July 1, 2018. We determined whether these providers were enrolled in Medicaid. Finally, we examined State contracts with MCOs to determine whether States included in their contracts with MCOs a provision that terminated providers are terminated from all Medicaid managed care networks.
WHAT WE FOUND
Nearly 1,000 terminated providers-or 11 percent of all terminated providers-were inappropriately enrolled in State Medicaid programs or were associated with $50.3 million in Medicaid payments after being terminated. These providers had been terminated for reasons such as criminal convictions, licensure issues, and provider misconduct and thus potentially posed a risk to beneficiaries’ safety and quality of care.
In addition, only eight States’ managed care contracts all clearly included the provision-required by the Cures Act-that prohibits terminated providers from participating in Medicaid managed care networks. This vulnerability may allow terminated providers to serve Medicaid beneficiaries and reduce States’ ability to limit these providers’ participation in Medicaid managed care networks. At the time of our review, CMS did not check for this Cures Act required provision when reviewing States’ contracts with MCOs. Overall, States paid at least $62.3 billion in capitation payments to plans under contracts that did not include the required provision.
Finally, States did not always provide complete and accurate Medicaid data to CMS, which limited the breadth of our analysis of claims, encounter records, and payments associated with terminated providers. Therefore, our findings understate the payments associated with contracts that did not contain the required Cures Act provision and may understate the payments associated with terminated providers.
WHAT WE RECOMMEND
To promote States’ compliance with the requirements of the Cures Act, we recommend that CMS (1) recover from States the Federal share of inappropriate fee-for-service Medicaid payments associated with terminated providers, (2) implement a method to recover from States the Federal share of inappropriate managed care capitation payments associated with terminated providers (3) follow up with States to remove terminated providers that OIG identified as inappropriately enrolled in Medicaid, (4) confirm that States do not continue to have terminated providers enrolled in their Medicaid programs, (5) safeguard Medicaid from inappropriate payments associated with terminated providers, and (6) review States’ contracts with MCOs to ensure that they clearly and specifically include the required provision that prohibits terminated providers from participating in Medicaid managed care networks. CMS concurred with all six of our recommendations.