Who’s Looking Out for Patients? OIG Recommends more CMS Oversight of Medicaid Managed Care Programs

  • Oct 1 2014

Office of the Inspector General of the federal Department of Health and Human Services (“OIG”) has issued a report that suggests that most states that offer Medicaid through Managed Care Organizations (“MCOs”) have widely-variable and possibly inadequate oversight of the organizations providing care to Medicaid beneficiaries.  Given OIG’s findings, beneficiaries, providers, and Medicaid MCOs should not be surprised if federal guidelines or regulations emerge that move toward standardizing access requirements and compliance assessments in Medicaid managed care.

OIG’s report suggests that some states may not be thoroughly monitoring patient access to care in the Medicaid Managed Care environment.  OIG examined the 33 states that offer Medicaid through managed care organizations, and found that standards for patient access varied widely.  More troubling, most of those states did not use strategies for evaluating patient access that OIG knows to be effective, and these states found no patient access violations over a five year period.

OIG concludes that the Centers for Medicare and Medicaid Services (“CMS”) should strengthen federal oversight of these state standards for evaluating access, and ensure that states strengthen their own oversight—CMS has agreed with those recommendations.

These findings may indeed be significant for the states, as well as Medicaid managed care organizations and providers who follow this area.  As OIG notes, Medicaid spending approaches  $460 billion across the country.  Increasingly, states have turned to managed care to deliver Medicaid care to beneficiaries, and have seen enrollment in these programs increase as the Patient Protection and Affordable Care Act has boosted both access and awareness among eligible individuals.

Federal regulations bind States that opt to offer Medicaid through MCOs and require that the states have specific, written strategies for assessing and improving the quality of managed care services offered in state, and regularly reporting to CMS on the effectiveness of those strategies.[1]  At minimum, the state’s assessment strategy must “[a]ssess the quality and appropriateness of care and services furnished” under the plan.[2]  Regulation also requires that the delivery network each MCO maintains is “sufficient to provide adequate access to all services” offered under those plans.[3]  The states are supposed to require MCOs to offer out-of-network coverage at no cost to beneficiaries if the MCO’s network cannot provide necessary services to the beneficiary.[4]

Given this oversight, OIG’s findings might be characterized as surprising—OIG found significant variation in the standards states set for access under Medicaid managed care.  More troubling, most states apparently do not require MCOs to meet certain benchmarks for specific provider types, including obstetricians, pediatricians, and other high-demand specialists within an MCO’s network.

In the context of this highly variable regulatory environment, most states do not use a method of assessing compliance known as direct testing.  OIG suggested that direct testing might allow states to determine whether the information that plans report about access is accurate.  Direct testing might involve placing calls to providers to learn estimated wait times for appointments, or whether providers participate in plans.  New York, for one, does conduct direct testing through its external quality review organization, and identified violations for the five-year period that OIG examined.

Providers and insurers in this environment should take note—federal regulators seem interested in setting national standards for patient access under Medicaid managed care.  The OIG report is available here.

Caitlin Monjeau wrote this post.  For more information, contact Caitlin.



[1] 42 C.F.R. § 438.202.

[2] 42 C.F.R. § 438.204(b).

[3] 42 C.F.R. § 438.206(b)(1).

[4] 42 C.F.R. § 438.206(b)(4).

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Posted in: Managed Long Term Care, Medicaid



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