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Medicaid Managed Care Reimbursement

States contract with managed care organizations (MCOs) to provide coverage for specific services to enrolled Medicaid beneficiaries. In return for covering those services, MCOs are paid a set monthly capitation payment. Previous work by Government Accountability Office found that Centers for Medicare & Medicaid Services’s oversight of States’ rate-setting required improvement and that States may not audit or independently verify the MCO-reported data used to set rates (GAO-10-810). We will review States’ managed care plan reimbursements to determine whether MCOs are appropriately and correctly reimbursed for services provided. We will ensure that the data used to set rates are reliable and include only costs for services covered under the State plan or costs of services authorized by Centers for Medicare & Medicaid Services (42 CFR § 438.6(e)). We will also verify that payments made under a risk-sharing mechanism and incentive payments made to MCOs are within the limits set forth in Federal regulations (42 CFR § 438.6(c)(5)(ii) and 42 CFR § 438.6(c)(5)(iii) and (iv)).

Announced or Revised Agency Title Component Report Number(s) Expected Issue Date (FY)
Nov-16 Centers for Medicare & Medicaid Services Medicaid Managed Care Reimbursement Office of Audit Services W-00-17-31471; various reviews 2018

Office of Inspector General, U.S. Department of Health and Human Services | 330 Independence Avenue, SW, Washington, DC 20201