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Medicaid Program Integrity: US GAO Finds CMS Needs Work to Develop More Effective Oversight Efforts

On April 17, 2017, the United States Government Accountability Office (GAO) released a report about the current state of Medicaid program integrity.

GAO conducted a study of the Medicaid program due to concerns about improper payments and was asked to conduct a study of the Centers for Medicare & Medicaid Services (CMS) to determine the efficacy of CMS’s oversight of the states.  The GAO determined that CMS has customized its state program integrity reviews to reflect the variances in each states’ managed care delivery systems. The GAO reviewed the on-site reviews that CMS conducted from 2014 through 2016 in thirty-one states. The GAO found that the reviews conducted by CMS focused on the each states’ managed care plans, as well as two other “high-risk areas per state, which included areas  such as provider enrollment, personal care services, or non-emergency medical transportation. CMS also implemented off-site desk reviews to increase its oversight of state program integrity efforts.

As part of the study, the GAO was also tasked with determining the use and implementation of collaborative audits between CMS contractors and the state. The decision to use collaborative audits is left to the states but the states are encouraged by CMS to use them.  In reviewing the use of collaborative audits, the GAO report found that “states’ use of audits varied significantly with 11 states not using any collaborative audits from 2012 to 2016.  Part of the varying use and continued use can be attributed to the mixed experiences that the states’ had.  Some states faced or feared limitations in the collaborative audit process because of staff investment, lack of familiarity with the state programs, the amount of time it took to work with CMS or problems communicating with contractors. Despite the varying degree of use, the GAO’s review of these collaborative audits for the states that had positive experiences, found that the audits “have identified substantial potential overpayments to providers. Overall, it was determined by the GAO “that there are opportunities for CMS to build upon its experience with these audits and enhance its collaboration with states and contractors on future audits and CMS needed to review and respond to the concerns identified by the states.

The GAO audit also found that “CMS lacks a systematic approach to collecting and communicating states’ promising program integrity practices.  The GAO audit found that CMS lacked effective communication strategies to both identify and communicate promising practices in the area of fraud and abuse.

As a result of the audit, the GAO offered two main recommendations in its report. First, in order to increase the efficacy and use of collaborative audits, the GAO recommended that CMS “identify opportunities to address barriers that limit states’ participation in collaborative audits, including “improving communication with states before, during, and after audits are completed; and, ensuring that audits align with states’ program integrity needs, including the need for oversight of services provided in managed care delivery systems.

Second, in order to address the lack or ineffective communication of promising program integrity practices, the GAO recommended that CMS work with states to implement a consistent and methodical approach to collecting state specific information on program integrity practices and create an effective communication strategy that relays such information in a timely manner.  The GAO found that these implementations would better support the states’ efforts to reduce improper payments.

For more information about the issued GAO report generally, please contact David R. Ross, Esq. or Mary T. Connolly, Esq.


David R. Ross is a Shareholder of the firm. Prior to joining the firm, and under former Governors Pataki and Spitzer, Mr. Ross served as the Acting Medicaid Inspector General for New York State. He also served as General Counsel, Deputy Medicaid Inspector General and Director of Audits and Investigations for the Office of the Medicaid Inspector General. Prior to his service at the Office of the Medicaid Inspector General, Mr. Ross held several positions at the New York State Office of Alcoholism and Substance Abuse Services (OASAS), including Acting General Counsel, Deputy Counsel, and Associate Counsel. Mr. Ross handles both Medicare and Medicaid audits and investigations for providers of all types and sizes. He can be reached at (518) 462-5601 or via e-mail at


Mary T. Connolly is an Associate of the firm and contributed to this article.  Her primary practice areas include health law and litigation. She can be reached at (518) 462-5601 or via e-mail at

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