Twenty-Three States Reported Allowing Unenrolled Providers To Serve Medicaid Beneficiaries

WHY WE DID THIS STUDY

An effective provider enrollment process plays a vital role in safeguarding Medicaid from fraudulent and abusive providers. To strengthen Medicaid provider enrollment, the 21st Century Cures Act (Cures Act) stipulated that States must require all Medicaid providers-both those in Medicaid fee-for-service (FFS) and Medicaid managed care-to enroll with their respective State Medicaid agencies. The Cures Act mandated that the Office of Inspector General (OIG) submit a report to Congress-by March 31, 2020-that assesses the extent to which States had enrolled all providers that serve Medicaid beneficiaries. As part of the request, OIG must also provide Congress with information about the amount of Federal financial participation (FFP) that States received for services provided by Medicaid managed care organizations (MCOs) with unenrolled providers.

HOW WE DID THIS STUDY

We based this study on data from the 49 States and the District of Columbia (States) that responded to our survey. One State (Massachusetts) did not respond. We requested information on the extent to which States had enrolled all providers. We conducted followup with 39 States to clarify their survey responses. We asked States to report the Federal dollars associated with unenrolled providers. Many States could not report FFP associated with unenrolled MCO network providers. As a result, we used information about capitation payments (i.e., payments that States make to MCOs) from Transformed Medicaid Statistical Information System (T MSIS). Finally, we queried staff from CMS on their work with States to enforce the Federal provider enrollment requirements.

WHAT WE FOUND

We found that-contrary to Federal requirements-23 States had not enrolled all providers serving Medicaid beneficiaries in their respective Medicaid programs. As a result, beneficiaries were exposed to potentially harmful providers that had not been screened for fraud, waste, and abuse. These 23 States reported that they had not enrolled all providers serving beneficiaries in Medicaid managed care or that they had not enrolled all ordering, referring, or prescribing (ORP) providers serving beneficiaries in Medicaid FFS.

• Twenty-one of the 23 States had not enrolled all providers in Medicaid managed care. The Cures Act required States to enroll these providers as of as of January 1, 2018. Most States had at least enrolled some, but not all, providers in the networks of MCOs. However, four States had not yet even attempted to enroll MCO network providers. At the time of this review, CMS reported that it was not disallowing reimbursements to States for expenditures that States incurred for payments associated with unenrolled providers in MCOs' networks because it does not have the specific authority to do so.
• The Federal share of these 21 States' expenditures for Medicaid managed care was $85 billion in 2018; States could not report the exact Federal share for individual unenrolled MCO network providers.
• Ten of the 23 States had not enrolled all ORPs in Medicaid fee for service as of January 1, 2017, the enrollment date required by the Cures Act.

Of the 27 States that reported enrolling all providers, 11 States enrolled all providers according to Federal requirements and had enforcement controls. However, 16 of the 27 States reported that they were not in compliance with the requirements to collect identifying and ownership information necessary for effectively screening Medicaid providers, or that they lacked enforcement controls to ensure ongoing State compliance with provider enrollment requirements.

WHAT WE RECOMMEND

We recommend that CMS (1) take steps to disallow Federal reimbursements to States for expenditures associated with unenrolled MCO network providers, including seeking necessary legislative authority; (2) work with States to ensure that unenrolled MCO network providers do not participate in Medicaid managed care and assist States in establishing ways to do so; (3) work with States to ensure that they have the controls required to prevent unenrolled ORPs from participating in Medicaid FFS; and (4) work with States to ensure that they are complying with requirements to collect identifying and ownership information on Medicaid provider enrollment forms. CMS concurred with all of our recommendations.