GAO calls for more oversight of managed care

The Government Accountability Office (GAO) said Wednesday that state and federal Medicaid auditors need to increase their oversight of managed care organizations.

In a new report, the GAO says Medicaid auditors are focusing their efforts on fraud and waste from fee-for-service payments while neglecting managed care organizations.


The agency recommends the Centers for Medicare and Medicaid Services (CMS) issue guidance to require states to audit payments to and by managed care organizations.

It also recommends CMS give additional support for oversight of such organizations by helping audit existing contractors.

Sen. Orrin HatchOrrin Grant HatchLobbying world Congress, stop holding 'Dreamers' hostage Drug prices are declining amid inflation fears MORE (R-Utah), the ranking member on the Senate Finance Committee who requested the report, said it was “particularly troubling” and called on CMS Administrator Marilyn Tavenner to implement GAO’s recommendations.

“CMS is responsible for safeguarding the billions of dollars it receives from hard-working American taxpayers,” Hatch said. “This report underscores the need for Medicaid reform in order to ensure that scarce tax dollars are used properly.”

GAO notes that currently CMS does not require states to audit managed care payments, leaving ambiguity over how to monitor payments from managed care organizations.

“Improving federal and state efforts to strengthen Medicaid managed care program integrity takes on greater urgency as states that choose to expand their Medicaid programs under the Patient Protection and Affordable Care Act are likely to do so with managed care arrangements, and will receive a 100 percent federal match for newly eligible individuals from 2014 through 2016,” the report said.

GAO warns if CMS doesn’t step up it will leave a growing portion of federal Medicaid dollars vulnerable to fraud and waste.