Providers Terminated from One State Medicaid Program Continued Participating in Other States

WHY WE DID THIS STUDY

Prior to passage of the Patient Protection and Affordable Care Act (ACA), if a State terminated a provider's participation in its Medicaid program, the provider could potentially participate in another State's Medicaid program, leaving the second State's program vulnerable to fraud, waste, or abuse committed by that provider. To prevent this from happening, the ACA requires States to terminate a provider's participation in their respective State Medicaid programs if that provider is terminated for cause (i.e., for reasons of fraud, integrity, or quality) from another State Medicaid program. In 2014, the Office of the Inspector General (OIG) published a report that recommended improvements to address weaknesses in CMS's process for sharing termination information among the States. This study builds on the prior report by determining whether Medicaid providers that States reported as having been terminated for cause continued to participate in Medicaid in other States.

HOW WE DID THIS STUDY

Because the termination data collected through CMS's process was not comprehensive and complete, we went directly to each State Medicaid agency and requested rosters of all individual Medicaid providers terminated in 2011 for cause. We also requested rosters of individual Medicaid providers participating in Medicaid fee for service and managed care on January 1, 2012. We compared these State-submitted rosters to determine if providers had been terminated. In January 2014, we followed up with State Medicaid agencies to determine if and when each provider's participation in Medicaid ended, and the amount that Medicaid paid each provider for services performed after the provider's termination for cause from another State program. We obtained information from State Medicaid agency staff about challenges in implementing the termination requirement.

WHAT WE FOUND

Despite the ACA requirement for States to terminate any providers already terminated for cause in another State, we found continued participation from such providers in other States' Medicaid programs. Specifically, we found that 12 percent of providers (295 of 2,539) terminated for cause in 2011 were still participating in other States' Medicaid programs in January 2012, and many continued to participate as late as January 2014. These Medicaid programs paid $7.4 million to 94 providers for services performed after each provider's termination for cause by the initial State. The challenges that States face in meeting the intent of the ACA legislation include not having a comprehensive data source for identifying all terminations for cause and difficulty differentiating such terminations from other administrative actions that a State reports. Further complicating States' ability to terminate providers is that, of the 41 States that used managed care to deliver Medicaid services, 25 States did not require providers who participated via managed care to be directly enrolled with the State Medicaid agency. If a State has not directly enrolled a provider, it cannot terminate that provider, and it may not even be aware that the provider is participating in its Medicaid program. Also challenging for some States is their misunderstanding that if a provider has an active license from the relevant State board, the State Medicaid agency should defer to the judgment of that board and not terminate the provider for cause.

WHAT WE RECOMMEND

In March 2014, OIG recommended that CMS require State Medicaid agencies to report all terminations for cause. We reiterate this prior recommendation as we found the lack of a comprehensive data source of providers terminated for cause creates a challenge for State Medicaid agencies. To address the remaining issues identified in this report, we recommend that CMS (1) work with States to develop uniform terminology to clearly denote terminations for cause, (2) require that State Medicaid programs enroll all providers participating in Medicaid managed care, and (3) furnish guidance to State agencies that termination is not contingent on the provider's active licensure status. CMS concurred with our recommendations.