CMS To Launch Medicaid Program Integrity Workgroup With States

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CMS is in the early stages of launching a Medicaid program integrity workgroup that states for months have been pushing the agency to set up as part of a holistic approach to overhauling the Medicaid program integrity arena. An agency official briefly mentioned the workgroup at a Sept. 20 House Oversight health subcommittee hearing where lawmakers highlighted billions of dollars in federal Medicaid overpayments to New York developmental centers. State Medicaid sources are closely watching to see if CMS' plan will match their call for a national effort to elevate the conversation about how Medicaid program integrity works -- or in some cases does not work -- and how the federal government and states can increase their collaboration.

At the hearing, Deputy Director of the Center for Medicaid and CHIP Penny Thompson mentioned the planned workgroup in the context of the problems identified in New York. After studying what led to these overpayments, CMS learned from the New York situation that current methods to enforce the upper payment limits are “not enough to protect federal dollars,” Thompson said, as they did not control excessive rates in New York, and that defined payment methodologies do not ensure appropriate payment rates. CMS also said the New York experience taught the agency that “our state partners themselves must also bear responsibility and accountability to identify anomalous payments and expenditures and address them proactively...when reasonable parameters of economy and efficiency are being breached.”

The participants in the workgroup and when it would convene have not yet been set, a state Medicaid source said. CMS had not answered questions on when the workgroup might be up and running by press time.

At last Thursday's hearing, Thompson told lawmakers that CMS plans to work with the National Association of Medicaid Directors to assemble a group of state Medicaid directors and program integrity subject matter experts to look at improving both financial management and program integrity in the program. Thompson's written testimony said the workgroup will identify best practices for financial management and states would “provide input as CMS develops a framework for measuring Medicaid program integrity return on investment.” The workgroup would also look at collaboration and alignment between Medicare and Medicaid program integrity efforts, the testimony states.

“This workgroup will allow CMS and its state partners to address problems, such as the rate in New York, in a collaborative, comprehensive manner,” Thompson told lawmakers.

At the hearing, the Oversight health subcommittee's fifth on Medicaid fraud, waste and abuse, lawmakers released a report that estimated CMS had made about $15 billion in overpayments to developmental centers in New York. This was a “brazen example of government failure,” committee Vice Chairman Paul Gosar (R-AZ) said, noting that private facilities performing the same functions received about 10 times less funding per patient than Medicaid funded developmental centers in New York. Although CMS noticed that the centers were being paid at rates beyond the actual costs for running the centers in 2007, they did not start working with New York on the problem until 2010, according to written testimony. Thompson said that while CMS is still finalizing new payment methodologies to correct the problem, the final payment rates for the centers are expected to be at about one fifth of current levels.

A state Medicaid source said that while CMS' commitment to developing the workgroup is a good thing, the workgroup envisioned by the states would not solve specific financial management problems like occurred in New York, but rather would take a much broader, more holistic look at program integrity. The workgroup ideally would include not only Medicaid but also Medicare experts, the state Medicaid source said.

But the source agreed with CMS that one goal of such a workgroup should be to develop a framework to measure a return on investment from different programs. One of the challenges to the current Medicaid program integrity is that it is is housed in different program silos and fragmented, which means finding a way to measure a return on investments as a whole is difficult. But CMS needs to go further, the state source said, and allow states to use solid measurement of returns to affect public policy. States should be able to strengthen programs that are shown to work well and cut back on ones that aren't, the source said, as opposed to funding all programs regardless of their performance.

The National Association of Medicaid Directors called for convening a similar task force in its March report on Medicaid Program Integrity. -- Michelle M. Stein (mstein@iwpnews.com)