The Centers for Medicare and Medicaid Services announced new and enhanced initiatives designed to improve Medicaid program integrity through greater transparency and accountability; strengthened data; and innovative and robust analytic tools.

Three major initiatives include:

• Emphasizing program integrity in audits of state claims for federal match funds and medical loss ratios. CMS will begin auditing some states based on the amount spent on clinical services and quality improvement versus administration and profit. The medical loss ratio audits will include reviewing states’ rate setting.
• Conduct new audits of state beneficiary eligibility determinations. CMS will audit states that have previously found to be high risk by the Office of Inspector General to examine how they determine which groups are eligible for Medicaid benefits. The audits will include assessing the effect of Medicaid expansion and its enhanced federal match rate on state eligibility policy. Regulations will allow CMS to begin to issue potential disallowances to states based on Payment Error Rate Measurement program findings in 2022.
• Optimize state-provided claims and provider data. CMS will utilize advanced analytics and other innovative solutions to both improve Medicaid eligibility and payment data and maximize the potential for program integrity purposes. For the first time, every state plus Washington, D.C., and Puerto Rico are now submitting enhanced data to CMS; CMS will be validating the quality and completeness of the data in the coming months.

“As we give states the flexibility they need to make Medicaid work best in their communities, integrity and oversight must be at the forefront of our role,” said CMS Administrator Seema Verma. “Beneficiaries depend on Medicaid and CMS is accountable for the long-term viability.”

A fact sheet on the program integrity strategy can be found in the CMS newsroom.