Medicaid Contractors Struggle to Identify Overpayments

James Carroll, April 26, 2012

Last month, the Office of Inspector General issued a report that presents an early assessment of the efforts of Audit Medicaid Integrity Contractors to identify overpayments in Medicaid. Contained within the report are drastic figures that convey the fact that Audit MICs are having a difficult time identifying overpayments in their audits.


Only 11% of the study-assigned audits were completed, with findings of $6.9 million in overpayments, $6.2 million of which resulted from seven completed collaborative audits involving Audit MICs, Review MICs, states, and CMS, according to the report.

This leaves 81% of audits in which the MICs were unable or unlikely to identify any underpayments or overpayments. The OIG suggests that problems with the data used and analysis conducted to identify audit targets led to this performance.

Another possible reason for the low volume of overpayments found is the lack of an overarching governing body over the Medicaid auditing landscape, suggests William Malm, ND, RN, CMAS, senior data projects manager in the Atlanta office of Craneware, Inc.

"States are having difficulty auditing on the Medicaid side due to the diversity and complexity of the regulations, and the lack of billing specifics in the individual state guidelines," he says. "These business practices have not been well documented and there is no defensible source authority to proclaim that something is an overpayment or an underpayment."

James Carroll James Carroll is associate editor for the HCPro Revenue Cycle Institute.
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