The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a report on March 20, 2012 on CMS’s Audit Medicaid Integrity Contractors (Audit MICs)—“Early Assessment of Audit Medicaid Integrity Contractors” (Audit MIC Report). This report, along with a companion study released in February 2012, “Early Assessment of Audit Medicaid Integrity Contractors” (Review MIC Report), offers insight into the “overall effectiveness of Medicaid integrity contractors and the Medicaid Integrity Program.” Review MICs are charged with identifying potential overpayments, while Audit MICs perform audits of providers who potentially received Medicaid overpayments.

According to the Audit MIC Report, the purpose of the OIG’s review was twofold: (1) to determine the extent to which Audit MICs identified overpayments; and (2) to identify barriers that hindered the identification of overpayment by the Audit MICs. As in the Review MIC Report, the study examined Audit MIC results for a six month period — January 1, 2010 through June 30, 2010. During this six-month period, CMS assigned Audit MICs 370 audit targets with $80 million in potential overpayments. According to the Audit MIC Report, 81 percent of the audits did not (or are unlikely to) identify overpayments. The OIG further provides that only 11 percent of assigned audits were completed by the Audit MICs which resulted in the identification of $6.9 million in overpayments. Of the $6.9 million in identified overpayments, $6.2 million was a result of seven collaborative audits involving Audit MICs, Review MICs, state agencies and CMS.