CMS Unveiling Stricter Oversight of Medicaid Due to Program Expansion

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With Medicaid expanding, CMS said it is unveiling increased and stricter oversight of the program.

With Medicaid expanding, CMS said Tuesday it is unveiling increased and stricter oversight of the program.

In a statement, CMS said the moves include “new and enhanced initiatives designed to improve Medicaid program integrity through greater transparency and accountability, strengthened data, and innovative and robust analytic tools.”

The initiatives include “stronger audit functions, enhanced oversight of state contracts with private insurance companies, increased beneficiary eligibility oversight, and stricter enforcement of state compliance with federal rules,” the agency said.


Last week, the Senate Budget Committee sent a letter to HHS Secretary Alex Azar asking for action regarding the findings of a Government Accountability Office (GAO) report that HHS had made about $89 billion in improper payments within Medicaid and Medicare. The committee asked for a written response by July 20, 2018.

In Tuesday’s announcement, CMS cited the increase in Medicaid spending, from $456 billion in 2013 to an estimated $576 billion in 2016. During those years, Medicaid expanded in 33 states to cover more people due to the Affordable Care Act. CMS said the program’s federal share grew during that time from $263 billion to an estimated $363 billion.

“Beneficiaries depend on Medicaid and CMS is accountable for the program’s long-term viability. As today’s initiatives show, we will use the tools we have to hold states accountable as we work with them to keep Medicaid sound and safeguarded for beneficiaries,” said Seema Verma, CMS administrator.

The actions include:

Emphasizing program integrity in audits of state claims for federal match funds and medical loss ratios (MLRs). CMS said it will begin auditing some states based on the amount spent on clinical services and quality improvement versus administration and profit. The MLR audits will include reviewing states’ rate setting. CMS said the audits will address issues identified by the GAO and Office of Inspector General (OIG).

Conduct new audits of state beneficiary eligibility determinations. CMS will audit states that have been previously found to be high risk by OIG to examine how they determine which groups are eligible for Medicaid benefits. These audits will include assessing the effect of Medicaid expansion and its enhanced federal match rate on state eligibility policy.

For instance, in its most recent report to Congress, OIG found that California and New York did not correctly determine Medicaid eligibility for newly eligible beneficiaries, and that New Jersey did not follow federal regulations and CMS guidance when developing payment rates for school-based Medicaid services.

Optimizing state-provided claims and provider data. CMS said it will use advanced analytics and other solutions to both improve Medicaid eligibility and payment data and maximize the potential for program integrity purposes.