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Excluded Providers in Medicaid Managed Care Plans


OIG is authorized to exclude certain individuals and entities (providers) from participating in federally funded health care programs. These programs, such as Medicaid managed care, are prohibited from paying for any items or services furnished, ordered, or prescribed by an excluded provider or paying anyone who contracts with an excluded provider. Nationally, approximately 70 percent of Medicaid recipients receive some or all of their Medicaid services through managed care. However, little was known about how Medicaid managed care entities (MCE) prevent excluded providers from entering their provider networks or how successful MCEs are in preventing excluded providers from entering their provider networks.


For 12 selected MCEs in 10 States, we matched OIG exclusions data, including approximately 46,000 providers, and MCE provider network data, including approximately 277,000 providers, to identify excluded providers. We also interviewed MCE and State Medicaid staff, and we reviewed contracts between MCEs and States to identify their safeguards to prevent excluded providers from enrolling in Medicaid. Finally, we asked each MCE to provide information on payments made to each excluded provider identified.


Four of the twelve MCEs reviewed had 11 excluded providers enrolled in their provider networks in 2009. Four of these providers were paid a total of $40,306 in 2009; the remaining seven providers received no payments during our review. In 2009, approximately 46,000 individuals and entities were listed on OIG's exclusion list. All 12 MCEs and all 10 States reviewed had safeguards to identify excluded providers. Eleven of the twelve selected MCEs checked OIG's List of Excluded Individuals and Entities to identify excluded providers. MCEs checked providers' exclusion statuses at initial enrollment and rechecked them at varying frequencies ranging from monthly to every 3 years. Six of the ten States required providers enrolled in MCE networks to first enroll in the State fee for-service Medicaid program. Two other States had databases that combined several sources of exclusion information available to their MCEs. In the two remaining States, each provider was required to undergo an extensive background check as part of the provider enrollment process.


We recognize that the number of excluded providers that we identified is small. CMS cited the small number of providers identified as its reason for not concurring with the recommendation made in the draft report. We updated the final report, recommending that CMS periodically remind States of their obligation to ensure that no excluded providers receive Medicaid payments. CMS could develop a State Medicaid Director letter that includes information from this report on how certain failures led to the inclusion of excluded providers in MCE provider networks.