	Background

The MIG has taken three different approaches since establishing the  NMAP—test audits, Medicaid Statistical Information System (MSIS)  audits, and collaborative audits. Working with the MIG and the states, the contractor audited 27  providers. States provided the initial audit targets based on their own  analysis of Medicaid Management Information System (MMIS) data. NMAP Contractor Expenditures

From June 2007 through February 2012, payments to the contractors for   On an annual  test, MSIS, and collaborative audits totaled $102 million.basis, these contractor payments account for more than 40 percent of all  of the MIG’s expenditures on Medicaid program integrity activities. The Majority of the MIG’s NMAP Audits Were MSIS Audits, Which Were Less Effective than Other Audit Approaches

The MSIS audits were less effective in identifying potential overpayments  than test and collaborative audits. As of February 2012, a small fraction of the 1,550  MSIS audits identified $7.4 million in potential overpayments. In contrast,  26 test audits and 6 collaborative audits together identified $12.5 million  in potential overpayments (see fig. 4.) MIG’s Redesign of the NMAP Has Potential Advantages, but MIG Has Not Been Transparent about Key Details of the Program’s Redesign

MIG’s redesigned NMAP focuses on collaborative audits, which may  enhance state Medicaid program integrity activities, and it also intends to  continue using MSIS data in some audits. CMS has not reported to Congress key  details about the changes it is making to the NMAP, including the  rationale for the redesign of the program, but it plans to discuss these  changes in its upcoming 2012 strategic plan. Generally, collaborative audits allow states to augment their own program  integrity audit capacity by leveraging MIG’s and its contractors’ resources. CMS Has Not Reported Key Details of Its NMAP Redesign to Congress

In its 2010 annual report to Congress on the Medicaid Integrity Program,  CMS announced that it was redesigning the NMAP in an effort to  enhance MIG programs and assist states with their program integrity  priorities, but it did not provide key details regarding the changes. However, MIG officials told us that they do not plan to discuss the  effectiveness of the use of funds for MSIS audits, or explain how the MIG  will monitor and evaluate the redesign. At this  time, the MIG is preparing a new comprehensive plan for Congress that  outlines the components of the NMAP redesign. Transparent communications and a well- articulated strategy to monitor and continuously improve NMAP are  essential components of any plan seeking to demonstrate that the MIG  can effectively manage the program. Recommendations for Executive Action

To effectively redirect the NMAP toward more productive outcomes and  to improve reporting under the DRA, the CMS Administrator should  ensure that the MIG’s planned update of its comprehensive plan (1) quantifies the NMAP’s  expenditures and audit outcomes; (2) addresses any program  improvements; and (3) outlines plans for effectively monitoring the  NMAP program, including how to validate and use any lessons  learned or feedback from the states to continuously improve the  audits;  future annual reports to Congress clearly address the strengths and  weaknesses of the audit program and its effectiveness; and use of NMAP contractors supports and expands states’ own program  integrity audits, engages additional states that are willing to participate  in collaborative audits, and explicitly considers state burden when  conducting audit activities. HHS partially concurred with our first recommendation and  fully concurred with the other two recommendations. 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: Thousands of Medicaid Providers Abuse the Federal Tax  System.
Why GAO Did This Study

Medicaid, the joint federal-state health care financing program for certain low-income individuals, has the second-highest estimated improper payments of any federal program. The Deficit Reduction Act of 2005 expanded the federal role in Medicaid program integrity, and the Centers for Medicare & Medicaid Services (CMS), the federal agency that oversees Medicaid, established the MIG, which designed the NMAP. Since the NMAPs inception, the MIG has used three different audit approaches: test, MSIS, and collaborative. This report focuses on (1) the effectiveness of the MIGs implementation of NMAP, and (2) the MIGs efforts to redesign the NMAP. To do this work, GAO analyzed MIG data, reviewed its contractors reports, and interviewed MIG officials, contractor representatives, and state program integrity officials.

What GAO Found

Compared to the initial test audits and the more recent collaborative audits, the majority of the Medicaid Integrity Groups (MIG) audits conducted under the National Medicaid Audit Program (NMAP) were less effective because they used Medicaid Statistical Information System (MSIS) data. MSIS is an extract of states claims data and is missing key elements, such as provider names, that are necessary for auditing. Since fiscal year 2008, 4 percent of the 1,550 MSIS audits identified $7.4 million in potential overpayments, 69 percent did not identify overpayments, and the remaining 27 percent were ongoing. In contrast, 26 test audits and 6 collaborative auditswhich used states more robust Medicaid Management Information System (MMIS) claims data and allowed states to select the audit targetstogether identified more than $12 million in potential overpayments. Furthermore, the median amount of the potential overpayment for MSIS audits was relatively small compared to test and collaborative audits.
The MIG reported that it is redesigning the NMAP, but has not provided Congress with key details about the changes it is making to the program, including the rationale for the change to collaborative audits, new analytical roles for its contractors, and its plans for addressing problems with the MSIS audits. Early results showed that this collaborative approach may enhance state program integrity activities by allowing states to leverage the MIGs resources to augment their own program integrity capacity. However, the lack of a published plan detailing how the MIG will monitor and evaluate NMAP raises concerns about the MIGs ability to effectively manage the program. Given that NMAP has accounted for more than 40 percent of MIG expenditures, transparent communications and a strategy to monitor and continuously improve NMAP are essential components of any plan seeking to demonstrate the MIGs effective stewardship of the resources provided by Congress.

What GAO Recommends

GAO recommends that the CMS Administrator ensure that the MIGs (1) update of its comprehensive plan provide key details about the NMAP, including its expenditures and audit outcomes, program improvements, and plans for effectively monitoring the program; (2) future annual reports to Congress clearly address the strengths and weaknesses of the audit program and its effectiveness; and (3) use of NMAP contractors supports and expands states own program integrity efforts through collaborative audits. HHS partially concurred with GAOs first recommendation commenting that CMSs annual report to Congress was a more appropriate vehicle for reporting NMAP results than its comprehensive plan. HHS concurred with the other two recommendations.