State Medicaid Agencies Routinely Fail To Notify Federal Authorities When They Sanction Providers, HHS OIG Report Finds

Main Category: Medicare / Medicaid / SCHIP
Article Date: 13 Aug 2008 - 7:00 PDT

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States regularly fail to notify the HHS Office of Inspector General when they have expelled health care providers from their Medicaid programs for incompetence, fraud and other reasons that would prohibit them from receiving federal reimbursements, according to federal investigators, the AP/San Francisco Chronicle reports. The lack of notice keeps the providers off OIG's reimbursement exclusion list, making it easier for barred providers to work in other areas of the country and continue to receive federal funds, according to the report.

Federal investigators surveyed states to determine how often Medicaid programs sanction a provider in a way that would place them in OIG's exclusion database. Reasons for exclusion include fraud convictions, patient abuse, licensing board sanctions and default on federal education health loans. No federal payments can be made for any services that an excluded provider performs, orders or prescribes, according to federal law. Forty-seven states responded to the survey.

OIG found that 61% of the 4,319 sanctions imposed by state Medicaid agencies in 2004 and 2005 were not on the federal list. States that had taken action against more than 100 providers tended to have high federal match rates with the list. Alabama, Louisiana and Texas had the highest match rates, with more than 80% of the providers suspended from their state Medicaid programs listed on the national database. New York and Florida, the two states that sanctioned the largest number of providers, had the lowest matching rates of 21% and 9%, respectively. About a dozen states, including California and Michigan, submitted incomplete data or reported not sanctioning any health care providers in 2004 and 2005.

Many state officials expressed uncertainty about the kind of information that was supposed to be forwarded to OIG. CMS spokesperson Jeff Nelligan said the agency will "strive to reduce the barriers that may currently exist" in order to increase the number of referrals from the states (Freking, AP/San Francisco Chronicle, 8/12).

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