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Fraud-prone providers slipping into states’ Medicaid programs, OIG says

Excepted from Becker Hospital Review By Morgan Haefner

Some state aren’t properly screening Medicaid providers who are at high risk for fraud, waste and abuse, according to a report from HHS’ Office of Inspector General.

A survey found 18 states had failed to implement a fingerprint-based criminal background check for Medicaid providers prone to fraud before a July 2018 deadline. At the start of 2019, 13 of the 18 states still had not implemented these checks.

OIG said “unscrupulous providers” could have entered states’ Medicaid programs through two loopholes in the provider enrollment process. “If not, all high-risk providers undergo criminal background checks, the Federal and State Governments are vulnerable to unscrupulous providers intent on defrauding the Medicaid program,” the agency said.

OIG recommended that CMS enact multiple steps to ensure all states use fingerprint-based criminal background checks when enrolling Medicaid providers.

Not all States have implemented fingerprint-based criminal background checks for high-risk providers in Medicaid. As of July 1, 2018—CMS’s ultimate deadline for implementation—18 States reported that they had not implemented these checks. By January 1, 2019, 5 of those 18 States had implemented criminal background checks, but the other 13 States had not. Further, three States did not report their implementation status to OIG despite several OIG attempts to obtain this information, and their implementation status is unknown.

The 13 States that had not implemented the checks by January 1, 2019, also varied as to the progress they had made toward full implementation. Five of the 13 States had not collected fingerprints from any of their providers. The remaining eight States had conducted criminal background checks for at least some of their high-risk providers. After the July 2018 deadline for States to implement the required background checks, CMS could consider as overpayments any payments that States have made to high-risk providers that had not undergone a criminal background check.45, 46 States must return to CMS the Federal share of overpayments related to noncompliance with provider enrollment requirements, including the requirements related to criminal background checks.

The 13 States that had not implemented criminal background checks by January 1, 2019, varied as to when they anticipated implementing them. Nine States reported that they anticipated doing so by the end of 2019, one State reported that it anticipated doing so in 2020, and three States reported that they did not know when they would implement the checks.