The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently issued a report on the Centers for Medicare and Medicaid Services’ (CMS’s) Review Medicaid Integrity Contractors (Review MICs) – “Early Assessment of Review Medicaid Integrity Contractors” (the OIG Report).  Additionally, on February 24, 2012, CMS published a notice in the Federal Register regarding Medicaid Recovery Audit Contractor (RAC) contingency fees.

A. Early Assessment of Review MICs

According to the OIG Report, the purpose of the OIG’s review was twofold: (1) to determine the extent to which Review MICs completed assignments, recommended audit leads, and identified potential fraud; and (2) to identify barriers that Review MICs encountered in their program integrity activities.  The study examined Review MIC assignments for a six month period—January 1, 2010 through June 30, 2010.  The OIG Report provides that while Review MICs completed 81 percent of their assignments, they had limited involvement in identifying potential fraud.  In fact, according to the OIG Report, Review MICs did not identify any potential fraud leads during the six month review period.

In the report, OIG notes that CMS projected $22.5 billion in Medicaid improper payments in fiscal year 2010.  While the OIG Report specifically provides that the study did not evaluate the effectiveness of the MIC program or CMS’s policies and procedures regarding Review MIC assignments, the effectiveness of the MIC program is naturally raised.

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