On August 28, 2023, OIG released a new webpage on managed care oversight, which features the HHS-OIG Strategic Plan for Oversight of Managed Care for Medicare and Medicaid. OIG has designated oversight of managed care as a priority area. OIG’s Strategic Plan outlines how OIG can align its audits, evaluations, investigations, and enforcement to combat the risks associated with managed care.
Managed Care Life Cycle
OIG developed an oversight framework it calls the managed care life cycle. The managed care life cycle consists of four stages, each of which presents unique risks that inform OIG’s oversight functions:
(1) plan establishment and contracting;
(3) payment; and
(4) provision of services.
Plan Establishment and Contracting
Risks for plans at this stage include the failure of plans to meet operational requirements or not providing adequate access to care for enrollees. OIG’s oversight of plan establishment and contracting will focus on review of contracts with the State or CMS, plan benefit design, establishment of plan service area, as well as accuracy and integrity of plan bids.
Risks for plans at this stage include aggressive marketing tactics by managed care plans to attract enrollees, and incorrect information reporting by plans to government entities. OIG’s oversight of enrollment will focus on marketing, agent or broker activities, eligibility determinations, as well as accuracy and use of enrollment data.
Risks for plans at this stage include misreporting member health status to receive higher payments, and improper plan payments to providers. OIG’s oversight of payment will focus on risk adjustment, payment accuracy, medical loss ratio, and the value-based care or other alternative payment mechanisms used by plans, States, and CMS. OIG will also continue to investigate the overlap in providers engaging in fraud while participating in fee-for-service Medicare and Medicaid while also providing services to patients enrolled in managed care networks.
Risks to plans at this stage include barriers to access of healthcare services imposed by plans, and lack of transparency in data reporting. OIG’s oversight will focus on network adequacy, ineligible or untrustworthy providers, coverage determinations, whether enrollees are receiving care that meets clinical guidelines, and fraud schemes that cross multiple plans and/or Federal health care programs.
Strategic Goals and Objectives
The OIG’s Strategic Plan presents three goals to combat the risks associated with each stage of the managed care life cycle:
(1) promote access to care for people enrolled in managed care;
(2) provide comprehensive financial oversight; and
(3) promote data accuracy and encourage data-driven decisions.
To implement this strategy, OIG will conduct rigorous oversight of managed care plans while also coordinating with those same plans to fight fraud, waste, and abuse.
A key priority for OIG is to ensure managed care plans provide enrollees with adequate access to healthcare services, including mental health services. OIG’s oversight will focus on whether healthcare services are available and obtainable in a timely manner. OIG will also ensure that the care provided to enrollees is safe, effective, and equitable. Not only should care meet established quality standards, but financial mechanisms should create a nexus between quality of care and payment. In addition, care should aim to promote the ability of all people to attain the highest level of health.
The Strategic Plan highlights OIG’s current work in this area, including its cross-program behavioral health study examining the ratio of providers to enrollees, the ability of providers to accept new patients and schedule appointments, and network adequacy. In addition, OIG analyzed denials of prior authorization requests by Medicare Advantage Organizations (MAOs) and found that MAOs routinely deny both prior authorization requests and payment requests that meet Medicare coverage rules.
The Federal Government spent more than $650 billion on Medicare and Medicaid managed care in 2022. According to OIG, financial oversight is critical to safeguarding taxpayer dollars and promoting a culture of compliance. OIG has two objectives to provide comprehensive financial oversight. First, OIG will ensure that payments made to Medicare Advantage and Medicaid plans are accurate, including by focusing on risk-adjusted capitation payments as well as the documentation and diagnostic submission patterns underlying them. OIG is aware that there are concerns that Medicare Advantage plans are using tools to increase risk-adjustment payments. Second, OIG will work to combat fraud in managed care plans, including by expanding its engagement with plans in coordinate with Federal and State law enforcement partners.
Examples of OIG’s current and completed work in furtherance of financial oversight are OIG’s audits of health plans to validate risk-adjusted payments, as well as OIG’s series of evaluations relating to the oversight and integrity of managed care plans’ reported medical loss ratios.
Data Accuracy and Data-Driven Decisions
OIG emphasizes that data must be accurate, timely and complete to ensure correct payments and the appropriate direction of resources. To this end, OIG will work to ensure that data are reported accurately, as well as to encourage the timely collection of complete data. This measure is meant to allow for identification of emerging risks in real time.
As an example of this work, OIG’s audits of Medicaid enrollment found that states made approximately $1 billion per year in questionable payments for concurrent enrollment in two different states or two different Managed Care Organizations (MCOs). OIG has also reported that the lack of provider identifiers of Medicare Advantage encounter data has prevented it from providing robust oversight.
OIG will continue to examine data issues, in both Medicare and Medicaid managed care, especially regarding collecting more robust data that will give critical insights into the program.
OIG’s Strategic Plan can be accessed here.