A Performance Audit of the Office of Inspector General of Medicaid Services: Policy Options for Improved Governance and Medicaid Oversight

Evaluate whether the Office of Inspector General of Medicaid Services (OIG) has adequately fulfilled its mandate to provide Medicaid oversight, including risk assessment, performance auditing, and reporting, per Utah Code.

Assess the governance, leadership, culture, transparency, and accountability within the OIG, and identify gaps in external reporting, ROI, and cost-avoidance metrics.

Compare Utah's OIG structure and practices with selected other states (e.g., Texas and New York) to identify best practices and feasible options for policy changes.

Identify policy options for Legislature to improve governance, accountability, and effectiveness of the OIG, including potential structural changes to oversight of audit and program integrity functions.

The OIG Leadership Has Failed to Adequately Prioritize High-Impact Audits and Therefore Has Been Delinquent in Fulfilling its Duties

The OIG Does Not Conduct Annual Planning, Limiting Its Ability to Provide Full Medicaid Coverage

The OIG Has Provided Insufficient Oversight of Accountable Care Organizations, In Which Other States Have Found Concerning Practices

The OIG Has Failed to Improve Its Office Governance and Impact

The OIG Has Inconsistent Performance Practices and Some Low Performance Outcomes

Certain Elements of the OIG’s External Reporting Have Lacked Accuracy and Transparency

The OIG Has Operated Under a Limited Oversight Structure

The Legislature Should Consider Policy Options to Improve Accountability of The Office of Inspector General

The OIG Does Not Publicly Report Medicaid Recommendations as Directed in Utah Code

The office reports good coordination with ACOs. However, coordination is not a replacement for oversight. The Office of Inspector General should provide improved oversight of Accountable Care Organizations. We recommend the office perform ongoing risk assessment and regular auditing of these organizations.

The Office of Inspector General publicly report its audit recommendations to Medicaid in its annual report and in its annual update to the Legislature. Doing so will improve recommendation quality and promote Medicaid accountability.

Program Integrity should conduct a formal analysis of the factors contributing to its inconsistent and, at times, negative return on investment (ROI). Following this analysis, Program Integrity must develop and implement a detailed action plan to enhance its efforts. Proper analysis, planning, and action should increase financial recoveries, ROI, and the office’s overall value.

Program Integrity and Audit should formalize and apply best practices for evaluating performance, including individual personnel performance, to ensure that personnel are held accountable to specific, measurable standards. The OIG should develop a comprehensive performance management policy that links performance to specific, quantifiable goals, which will, in turn, lead to more efficient operations and improve overall program effectiveness.

The Audit and Program Integrity functions formalize and consistently implement its external reporting processes, ensuring all statutory requirements are met, and that reported metrics are accurate, complete, and presented with transparent and consistent methodologies.

Program Integrity should reconsider the usefulness of the cost avoidance metric. If it chooses to continue, the methodology must be formally documented, published on the OIG’s website, and include a clear, justifiable basis for the projection period. All annual reports should clearly detail the calculations and assumptions used to arrive at the final cost avoidance.

The Office of Inspector General should prioritize the office’s work according to the highest overall risk. The office should perform ongoing, holistic, risk-based assessments of the Medicaid program to ensure high impact risks are identified.

The Office of Inspector General should continually engage in performance-based auditing of Medicaid by reviewing for cost efficiencies, effectiveness, and outcomes. The office can do this by including performance elements for Medicaid in its annual risk assessment and reporting its results in its annual report. Doing so will add greater value and accountability.

The Office of Inspector General should provide additional value-added analyses by providing cost-efficiency, cost-driver, and other timely Medicaid-related information to the Legislature. This information should be included in its annual report to the Legislature. Doing so will ensure the office maximizes its expected Medicaid expertise to the State of Utah.

The Office of Inspector General conduct annual planning, considering broad coverage of Medicaid operations. The office should regularly report to the Legislature on its progress toward its annual work plan, including details on audit activities, audits initiated and finalized, and audit findings. Doing so will ensure the office is focused on demonstrating broad coverage and accountability for the entire Medicaid program.