Managed Care
Last Updated: 08-27-2024
The growth of managed care over the last several years has changed fundamental aspects of the Medicare and Medicaid programs. This significant shift transformed how the government pays for and covers health care for approximately 100 million enrollees.
![During 2023, 54 percent of people in Medicare received their care through a Medicare Advantage plan. During 2023, the government spent an estimated $454 billion. Medicaid Managed Care has experience similar growth. Currently, 81% of Medicaid beneficiaries receive at least one component of their care through managed care. The federal match for Medicaid managed care was $254 billion in 2021.](./managed-care-web-graphics_numbers.png)
Strategic Plan
Download the Managed Care Strategic Plan
The OIG has designated oversight of managed care as a priority area. OIG has developed a strategy to align its audits, evaluations, investigations, and enforcement of managed care. The HHS-OIG Strategic Plan for Oversight of Managed Care for Medicare and Medicaid has three goals:
- Promote access to care for people enrolled in managed care
- Provide comprehensive financial oversight
- Promote data accuracy and encourage data-driven decisions
OIG developed the managed care life cycle to guide oversight and enforcement work. The life cycle of managed care is fourfold: plan establishment and contracting, enrollment, payment, and the provision of services. Each stage of this life cycle raises different risks and vulnerabilities.
![Life cycle diagram](./managed-care-web-graphics_lifecycle.png)
Resources
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Audits
The Office of Audit Services conducts independent audits of HHS programs and/or HHS grantees and contractors. These audits examine the performance of HHS programs and/or grantees in carrying out their responsibilities and provide independent assessments of HHS programs and operations. These audits help reduce waste, abuse, and mismanagement and promote economy and efficiency throughout HHS. The most recent managed care related audits are listed below.
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- Medicare Advantage Compliance Audit of Diagnosis Codes That MMM Healthcare, LLC, (Contract H4003) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That MediGold (Contract H3668) Submitted to CMS
- Toolkit: To Help Decrease Improper Payments in Medicare Advantage Through the Identification of High-Risk Diagnosis Codes
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That SelectCare of Texas, Inc. (Contract H4506), Submitted to CMS
- Medicare Advantage Compliance Audit of Diagnosis Codes That Health Net of California, Inc. (Contract H0562) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Aetna, Inc. (Contract H5521) Submitted to CMS
- Medicare Advantage Compliance Audit of Diagnosis Codes That CarePlus Health Plans, Inc. (Contract H1019) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Presbyterian Health Plan, Inc. (Contract H3204) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Excellus Health Plan, Inc. (Contract H3351) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Keystone Health Plan East, Inc. (Contract H3952) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That HumanaChoice (Contract H6609) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Cigna-HealthSpring Life & Health Insurance Company, Inc. (Contract H4513) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That MCS Advantage, Inc. (Contract H5577) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Geisinger Health Plan (Contract H3954) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Cigna-HealthSpring of Tennessee, Inc. (Contract H4454) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That BCBS of Rhode Island (Contract H4152) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That California Physicians' Service, Inc. (Contract H0504) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That HumanaChoice (Contract R5826) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Highmark Senior Health Company (Contract H3916) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That BlueCross BlueShield of Tennessee, Inc. (Contract H7917) Submitted to CMS
- Medicare Advantage Compliance Audit of Diagnosis Codes That Inter Valley Health Plan, Inc. (Contract H0545), Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Regence BlueCross BlueShield of Oregon (Contract H3817) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That WellCare of Florida, Inc., (Contract H1032) Submitted to CMS
- Medicare Advantage Compliance Audit of Diagnosis Codes That Cigna HealthSpring of Florida, Inc. (Contract H5410) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Cariten Health Plan, Inc., (Contract H4461) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Peoples Health Network (Contract H1961) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Tufts Health Plan (Contract H2256) Submitted to CMS
- Medicare Advantage Compliance Audit of Diagnosis Codes That SCAN Health Plan (Contract H5425) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Healthfirst Health Plan, Inc., (Contract H3359) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That UPMC Health Plan, Inc. (Contract H3907) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Coventry Health Care of Missouri, Inc. (Contract H2663) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Anthem Community Insurance Company, Inc. (Contract H3655) Submitted to CMS
- Medicare Advantage Compliance Audit of Diagnosis Codes That Humana, Inc., (Contract H1036) Submitted to CMS
- Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Blue Cross Blue Shield of Michigan (Contract H9572) Submitted to CMS
- Some Diagnosis Codes That Essence Healthcare, Inc., Submitted to CMS Did Not Comply With Federal Requirements
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- New Mexico Should Refund Almost $120 Million to the Federal Government for Medicaid Nursing Facility Level-of-Care Managed Care Capitated Payments
- CMS Did Not Ensure That Selected States Complied With Medicaid Managed Care Mental Health and Substance Use Disorder Parity Requirements
- Delaware Made Capitation Payments to Medicaid Managed Care Organizations After Enrollees’ Deaths
- Multiple States Made Medicaid Capitation Payments to Managed Care Organizations After Enrollees' Deaths
- New York Did Not Ensure That a Managed Care Organization Complied With Requirements for Denying Prior Authorization Requests
- Amerigroup Iowa's Prior Authorization and Appeal Processes Were Effective, but Improvements Can Be Made
- Texas Made Capitation Payments for Enrollees Who Were Concurrently Enrolled in a Medicaid Managed Care Program in Another State
- Puerto Rico Claimed Over $7 Million in Federal Reimbursement for Medicaid Capitation Payments Made on Behalf of Enrollees Who Were or May Have Been Deceased
- Puerto Rico Claimed More Than $500 Thousand in Unallowable Medicaid Managed Care Payments for Enrollees Assigned More Than One Identification Number
- Florida Did Not Refund $106 Million Federal Share of Medicaid Managed Care Rebates It Received for Calendar Years 2015 Through 2020
- Office of Inspector General's Partnership With the Commonwealth of Massachusetts Office of the State Auditor: Office of Medicaid (MassHealth)-Review of Capitation Payments
- Virginia Made Capitation Payments to Medicaid Managed Care Organizations After Enrollees' Deaths
- Florida Made Capitation Payments for Enrollees Who Were Concurrently Enrolled in a Medicaid Managed Care Program in Another State
- Keystone First Should Improve Its Procedures for Reviewing Service Requests That Require Prior Authorization
- California Made Almost $16 Million in Unallowable Capitation Payments for Beneficiaries With Multiple Client Index Numbers
- Nearly All States Made Capitation Payments for Beneficiaries Who Were Concurrently Enrolled in a Medicaid Managed Care Program in Two States
- New Mexico Did Not Claim $12.4 Million of $222.6 Million in Medicaid Payments for Services Provided by Indian Health Service Facilities in Accordance with Federal and State Requirements
- Kentucky Made Almost $2 Million in Unallowable Capitation Payments for Beneficiaries With Multiple Medicaid ID Numbers
- Minnesota Medicaid Managed Care Entities Used a Majority of Medicaid Funds Received for Medical Expenses and Quality Improvement Activities
- Kansas Made Capitation Payments to Managed Care Organizations After Beneficiaries' Deaths
- Texas Made Unallowable Children's Health Insurance Program Payments for Beneficiaries Assigned More Than One Identification Number
- New York Made Unallowable Payments Totaling More Than $9 Million to the Same Managed Care Organization for Beneficiaries Assigned More Than One Medicaid Identification Number
- Minnesota Made Capitation Payments to Managed Care Organizations for Medicaid Beneficiaries With Concurrent Eligibility in Another State
- Illinois Made Capitation Payments to Managed Care Organizations for Medicaid Beneficiaries With Concurrent Eligibility in Another State
- Risk Assessment of Puerto Rico Medicaid Program
- Ohio Made Capitation Payments to Managed Care Organizations for Medicaid Beneficiaries With Concurrent Eligibility in Another State
- North Carolina Made Capitation Payments to Managed Care Entities After Beneficiaries' Deaths
- The New York State Medicaid Agency Made Capitation Payments To Managed Care Organizations After Beneficiaries' Deaths
- New Jersey Did Not Ensure That Its Managed Care Organizations Adequately Assessed and Covered Medicaid Beneficiaries' Needs for Long-Term Services and Supports
- Michigan Made Capitation Payments to Managed Care Entities After Beneficiaries' Deaths
- The Indiana State Medicaid Agency Made Capitation Payments to Managed Care Organizations After Beneficiaries' Deaths
- Texas Did Not Ensure That Its Managed-Care Organizations Complied With Requirements Prohibiting Medicaid Payments for Services Related to Provider-Preventable Conditions
- The Minnesota State Medicaid Agency Made Capitation Payments to Managed Care Organizations After Beneficiaries' Deaths
- Ohio Made Medicaid Capitation Payments That Were Duplicative or Were Improper Based on Beneficiary Eligibility Status or Demographics
- Illinois Medicaid Managed Care Organizations Received Capitation Payments After Beneficiaries' Deaths
- Georgia Medicaid Managed Care Organizations Received Capitation Payments After Beneficiaries' Deaths
- Pennsylvania Did Not Ensure Its Managed-Care Organizations Complied With Requirements Prohibiting Medicaid Payments for Services Related to Treating Provider-Preventable Conditions
- Massachusetts Did Not Ensure Its Managed-Care Organizations Complied With Requirements Prohibiting Medicaid Payments for Services Related to Provider-Preventable Conditions
- California Medicaid Managed Care Organizations Received Capitation Payments After Beneficiaries' Deaths
- New Mexico Did Not Always Appropriately Refund the Federal Share of Recoveries from Managed Care Organizations
- Rhode Island Did Not Ensure Its Managed-Care Organizations Complied With Requirements Prohibiting Medicaid Payments for Services Related to Provider-Preventable Conditions
- Ohio Medicaid Managed Care Organizations Received Capitation Payments After Beneficiaries' Deaths
- Wisconsin Medicaid Capitation Payments Made on Behalf of Individuals Whose Date of Death was Prior to the Payment Date
- Tennessee Managed Care Organizations Received Medicaid Capitation Payments After Beneficiary's Death
- Texas Managed Care Organizations Received Medicaid Capitation Payments After Beneficiary's Deaths
- New York State Improperly Claimed Medicaid Reimbursement for Some Managed Long-Term Care Payments
- Florida Managed Care Organizations Received Medicaid Capitation Payments After Beneficiary's Death
Evaluations and Inspections
The Office of Evaluation and Inspections conducts national evaluations of HHS programs from a broad, issue-based perspective. The evaluations incorporate practical recommendations and focus on preventing fraud, waste or abuse and encourage efficiency and effectiveness in HHS programs. The most recent managed care related evaluations are listed below.
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- A Lack of Behavioral Health Providers in Medicare and Medicaid Impedes Enrollees’ Access to Care
- The Inability to Identify Denied Claims in Medicare Advantage Hinders Fraud Oversight
- Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care
- Some Medicare Advantage Companies Leveraged Chart Reviews and Health Risk Assessments to Disproportionately Drive Payments
- Medicare Advantage Organizations Are Missing Opportunities To Use Ordering Provider Identifiers To Protect Program Integrity
- Billions in Estimated Medicare Advantage Payments From Diagnoses Reported Only on Health Risk Assessments Raise Concerns
- CMS's Encounter Data Lacks Essential Information That Medicare Advantage Organizations Have the Ability to Collect
- Billions in Estimated Medicare Advantage Payments from Chart Reviews Raise Concerns
- Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials
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- Medicaid Managed Care: States Do Not Consistently Define or Validate Paid Amount Data for Drug Claims
- A Lack of Behavioral Health Providers in Medicare and Medicaid Impedes Enrollees’ Access to Care
- High Rates of Prior Authorization Denials by Some Plans and Limited State Oversight Raise Concerns About Access to Care in Medicaid Managed Care
- UPICs Hold Promise to Enhance Program Integrity Across Medicare and Medicaid, But Challenges Remain
- CMS Has Opportunities to Strengthen States' Oversight of Medicaid Managed Care Medical Loss Ratios
- States Reported Multiple Challenges With Using Telehealth To Provide Behavioral Health Services to Medicaid Enrollees
- Opportunities Exist To Strengthen Evaluation and Oversight of Telehealth for Behavioral Health in Medicaid
- Nationwide, Almost All Medicaid Managed Care Plans Achieved their Medical Loss Ratio Targets
- Data on Medicaid Managed Care Payments to Providers Are Incomplete and Inaccurate
- States Could Do More To Prevent Terminated Providers From Serving Medicaid Beneficiaries
- Provider Shortages and Limited Availability of Behavioral Health Services in New Mexico’s Medicaid Managed Care
- Weaknesses Exist In Medicaid Managed Care Organizations’ Efforts to Identify and Address Fraud and Abuse
Work Plan Items
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Criminal and Civil
OIG often works with government partners to investigate allegations of fraud in managed care. Some examples of case resolutions involving Medicare and/or Medicaid managed care fraud allegations:
- Former Executive at Medicare Advantage Organization Charged for Multimillion-Dollar Medicare Fraud Scheme
- Cigna Group to Pay $172 Million to Resolve False Claims Act Allegations
- Martin’s Point Health Care Inc. to Pay $22,485,000 to Resolve False Claims Act Allegations
- California County Organized Health System and Three Health Care Providers Agree to Pay $70.7 Million for Alleged False Claims to California’s Medicaid Program
- California County Organized Health System and Three Health Care Providers Agree to Pay $68 Million for Alleged False Claims to California’s Medicaid Program
- U.S. Attorney Announces $7.85 Million Settlement With Citadel Skilled Nursing Facility In Bronx For Fraudulently Switching Residents' Healthcare Coverage To Boost Medicare Payments
- MCS Advantage Agrees to Pay 4.2 Million Dollars to Resolve Allegations that it Violated the False Claims Act and Anti-Kickback Statute
- Sutter Health and Affiliates to Pay $90 Million to Settle False Claims Act Allegations of Mischarging the Medicare Advantage Program
- Medicare Advantage Provider and Physician to Pay $5 Million to Settle False Claims Act Allegations
- Medicare Advantage Provider to Pay $6.3 Million to Settle False Claims Act Allegations
- Medicare Advantage Provider to Pay $270 Million to Settle False Claims Act Liabilities
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OIG annually publishes the top unimplemented recommendations that, in our agency's view, would most positively affect HHS programs in terms of cost savings, program effectiveness and efficiency, and public health and safety if implemented. Recommendations regarding managed care that were unimplemented as of December 2022 appear below. All top unimplemented recommendations of 2022.
- CMS should monitor and provide targeted oversight for Medicare Advantage Organizations (MAOs) that had a disproportionate share of risk-adjusted payments from chart reviews and health reimbursement arrangements.
- CMS should require MAOs to submit and encourage MAOs to provide program oversight based on an ordering provider’s national provider identifier on encounter records for DME, prosthetics, orthotics, and supplies, as well as for laboratory, imaging, and home health services.
- CMS should identify States with limited availability of behavioral health services and develop strategies and share information to ensure that Medicaid managed care enrollees have timely access to these services.
- CMS should improve Medicaid managed care organizations’ (MCOs’) identifications and referrals of cases of suspected fraud or abuse.
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OIG annually identifies top management and performance challenges HHS faces as it strives to fulfill its mission. View challenges regarding managed care below.
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OIG regularly testifies before Congress in oversight hearings. Below are links for hearings related to managed care.