To implement the Medicaid Integrity Program, CMS created the  Medicaid Integrity Group (MIG), which is now located within the agency’s  Center for Program Integrity. The Medicaid Recovery Audit Contractor (RAC) program was established  by PPACA. Figure 1 identifies the key federal and state entities  responsible for Medicaid program integrity. CMS’s MIG Implemented Core Activities from 2006 through 2009 but Effective Coordination Is Needed Because of Overlap with Ongoing State Efforts

A key challenge CMS faces in implementing the statutorily required  federal Medicaid Integrity Program is ensuring effective coordination to  avoid duplicating state program integrity efforts. CMS established the MIG  in 2006 and it gradually hired staff and contractors to implement a set of  core activities, including the (1) review and audit of Medicaid provider  claims; (2) education of state program integrity officials and Medicaid  providers; and (3) oversight of state program integrity activities and  provision of assistance. In 2011, the MIG reported that it was redesigning its  national provider audit program to allow for greater coordination with  states on data, policies, and audit measures. According to MIG data,  overpayments identified by its review and audit contractors over the first   3 years of the national audit program were not commensurate with the  contractors’ costs. One of  the first activities initiated by the MIG in fiscal year 2007 was  comprehensive program integrity reviews to assess the effectiveness of  states’ activities, which involved eight, week-long onsite visits that year. From fiscal  years 2009 through 2011, the MIG authorized 1,663 provider audits in 44  states. The MIG’s proposed redesign of the National Provider Audit Program  appears to allow for greater coordination between its contractors and  states on a variety of factors, including the data to be used. It  remains to be seen, however, whether these changes will result in an  increase in identified overpayments. Expanded Role Offers Opportunity to Enhance State Efforts, but More Consistent Data Are Needed

While the MIG’s audit program is challenged to avoid duplicating states’  own audit activities, its other core functions present an opportunity to  enhance states’ efforts. The Medicaid Integrity Institute  appears to address an important state training need. MIG’s Core Oversight Activities Are Broad, but the Data Collected During Reviews and Assessments Were Not Always Consistent with Each Other

The MIG’s core oversight activities—triennial comprehensive state  program integrity reviews and annual assessments—are broad in scope  and provide a basis for the development of appropriate technical  assistance. Improved consistency will help the MIG ensure that it is targeting  its training and technical assistance resources appropriately. We discussed the facts in this statement with CMS officials. Fraud Detection Systems: Centers for Medicare and Medicaid Services  Needs to Ensure More Widespread Use. Status of Fiscal Year 2010 Federal Improper Payments Reporting. Medicaid Program Integrity: State and Federal Efforts to Prevent and  Detect Improper Payments.
Why GAO Did This Study

The Centers for Medicare & Medicaid Services (CMS), the federal agency that oversees Medicaid, estimated that improper payments in the federal-state Medicaid program were $21.9 billion in fiscal year 2011. The Deficit Reduction Act of 2005 established the Medicaid Integrity Program and gave CMS an expanded role in assisting and improving the effectiveness of state activities to ensure proper payments. Making effective use of this expanded role, however, requires that federal resources are targeted appropriately and do not duplicate state activities. GAO was asked to testify on Medicaid program integrity. GAO's statement focuses on how CMS's expanded role in ensuring Medicaid program integrity (1) poses a challenge because of overlapping state and federal activities regarding provider audits and (2) presents opportunities through oversight to enhance state program integrity efforts. To do this work, GAO reviewed CMS reports and documents on Medicaid program integrity as well as its own and others' reports on this topic. In particular, GAO reviewed CMS reports that documented the results of its state oversight and monitoring activities. GAO also interviewed CMS officials in the agency's Medicaid Integrity Group (MIG), which was established to implement the Medicaid Integrity Program. This work was conducted in November and December 2011. GAO discussed the facts in this statement with CMS officials.

What GAO Found

The key challenge faced by the Medicaid Integrity Group (MIG) is the need to avoid duplication of federal and state program integrity efforts, particularly in the area of auditing provider claims. In 2011, the MIG reported that it was redesigning its national provider audit program. Previously, its audit contractors were using incomplete claims data to identify overpayments. According to MIG data, overpayments identified by its audit contractors since fiscal year 2009 were not commensurate with its contractors' costs. The MIG's redesign will result in greater coordination with states on a variety of factors, including the data to be used. It remains to be seen, however, whether these changes will result in an increase in identified overpayments. The table below highlights the MIG's core oversight activities, which were implemented from fiscal years 2007 through 2009. The MIG's core oversight activities present an opportunity to enhance state efforts through the provision of technical assistance and the identification of training opportunities. The MIG's assessment of state program integrity efforts during triennial onsite reviews and annual assessments will need to address data inconsistencies identified during these two activities. Improved consistency will help ensure that the MIG is appropriately targeting its resources. The Medicaid Integrity Institute appears to address a state training need and create networking opportunities for program integrity staff.