Program Integrity in Medicaid Managed Care

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June 2017 | Managed Care

Chapter 3 presents an in-depth examination of program integrity activities in Medicaid managed care. Traditionally, most states operated Medicaid on a fee-for-service system that enrolled and paid providers directly for discrete services. Today, however, comprehensive managed care is the primary Medicaid delivery system in over half the states, and states delegate these responsibilities to private managed care organizations (MCOs). This shift has important consequences for strategies to ensure program integrity, as MCOs are given primary responsibility for oversight of providers and claim payments while states assume broader program oversight responsibility.

Chapter 3’s analysis draws on interviews with 10 states, 3 managed care organizations, and relevant federal agencies, finding that while many program integrity practices are perceived to be effective, there are few mechanisms for measuring return on investment or for sharing best practices. The chapter also notes the need for greater coordination between managed care oversight and program integrity functions as well as better data on managed care encounters.

The chapter also discusses the Centers for Medicare & Medicaid Services 2016 update to federal managed care regulations. Many stakeholders believe the 2016 rule will strengthen managed care program integrity and lead to greater consistency across states. However, as of June 2017 states are still implementing major portions of the rule, making it too early to assess the rule’s ultimate effect.

Publication Type: Reports to Congress

From: June 2017 Report to Congress on Medicaid and CHIP

Tags: administration, encounter data, managed care, program integrity, waste/fraud/abuse