Medicaid Provider Enrollment Performance Audit
Learn how the AI-generated research projects were createdOverall Conclusion
The Medicaid Provider Enrollment process in North Carolina did not adequately ensure that only qualified providers were enrolled to serve Medicaid beneficiaries or to receive payments. The Division failed to monitor license suspensions/terminations, allowed providers with license limitations to stay enrolled, did not verify credentials during re-verification, and did not verify ownership information, leading to uncredentialed providers being paid and heightened fraud risk. CMS regulations and state policy require robust credential verification, timely removal of suspended/license-limit providers, and ownership disclosures; gaps persisted during SFY 2019, increasing the risk of substandard care and improper payments.
Source Document
Audit Scope
The audit covered the Medicaid Provider Enrollment process in North Carolina for state fiscal year 2019, including initial enrollment, provider re-verification every five years, and ongoing discipline checks of professional licenses. The Division of Health Benefits outsources most screening/enrollment work to General Dynamics Information Technology (GDIT) but retains ultimate responsibility; NCTracks is used for enrollment and re-verification, including a background, license, and discipline checks through LexisNexis and monthly background reports. The population consisted of approximately 90,000 Medicaid providers in SFY2019, with specific audit samples: 16,044 enrolled providers tested from 2019 approved enrollment applications; 27,334 re-verified providers tested from 2019 approved re-verification applications; 40,284 flagged providers tested for manual review; and 66 disciplined providers tested for ongoing discipline checks. Results include failures in identifying/removing suspended/terminated licenses, license limitations, incomplete credential verification, and lack of ownership verification, all contributing to potential improper payments and risks to beneficiary safety.
Key Findings Summary
Providers without required credentials paid $11.2 million: The Division did not verify credentials during the Medicaid provider enrollment re-verification process; uncredentialed providers were re-verified, served beneficiaries, and were paid; credentials were not verified for many months/years.
Unlicensed providers served Medicaid beneficiaries and received payments: The Division did not identify and remove providers with suspended or terminated professional licenses; unlicensed providers remained enrolled and paid because disciplinary reports from licensing boards were not monitored.
Division increased risk to Medicaid program and beneficiaries by allowing providers with license limitations to remain enrolled in Medicaid: The Division allowed all providers who had professional license limitations to remain enrolled, despite potential safety concerns.
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AI-Assisted
AI-Generated Insight
This report highlights systemic gaps in ongoing credential verification and ownership disclosure during Medicaid provider re-verification. The reliance on automated tools without primary source verification created backlogs and allowed uncredentialed providers to bill, while authority gaps complicated removal of providers with license limitations. Addressing these weaknesses would strengthen program integrity, reduce improper payments, and improve beneficiary safety.
Audit Objectives
Determine whether the Medicaid Provider Enrollment process ensures that only qualified providers are approved to provide services to Medicaid beneficiaries and to receive payments from North Carolina’s Medicaid program.
Audit Findings (4)
Providers without required credentials paid $11.2 million: The Division did not verify credentials during the Medicaid provider enrollment re-verification process; uncredentialed providers were re-verified, served beneficiaries, and were paid; credentials were not verified for many months/years.
Unlicensed providers served Medicaid beneficiaries and received payments: The Division did not identify and remove providers with suspended or terminated professional licenses; unlicensed providers remained enrolled and paid because disciplinary reports from licensing boards were not monitored.
Division increased risk to Medicaid program and beneficiaries by allowing providers with license limitations to remain enrolled in Medicaid: The Division allowed all providers who had professional license limitations to remain enrolled, despite potential safety concerns.
Division did not verify provider ownership information; millions paid to providers who potentially should have been removed from Medicaid, and fraud risk was increased: Ownership information was not verified; 21 of 191 tested providers did not disclose complete and accurate ownership, leading to payments.
Recommendations (14)
Verify the accuracy of all provider ownership disclosures so that background checks can be performed. When providers submit inaccurate information but are still allowed to enroll, document the reasons why termination or denial of enrollment is not in the best interests of the Medicaid program.
Improve documentation supporting the approval of higher-risk providers and consider increasing oversight of these providers.
Increase oversight of Local Management Entities/Managed Care Organizations provider enrollment.
Monitor reports from all state licensing boards that regulate services covered by the Medicaid program to identify and remove providers with suspended or terminated professional licenses.
Create written policies and procedures for continued enrollment of providers with license limitations; describe types of limitations acceptable and require adequate documentation; ensure CMS regulations compliance.
Remove providers who do not have the appropriate professional credentials from the Medicaid program (State Plan alignment).
Source verify credentials for the 21 providers for whom credentialing documentation was unavailable.
Source verify credentials directly with credentialing agencies during re-verification rather than relying on the crawler/LexisNexis; fix crawler or implement compensating procedures.
Source verify professional credentials of enrolled Medicaid providers during the re-verification process at least every five years to ensure qualified providers participate.
Verify the accuracy of all provider ownership disclosures; perform background checks and monitor providers with inaccurate disclosures; document the reasons for enrollment decisions; increase monitoring where appropriate.
The Secretary should have a method to ensure the Division complies with CMS regulations.
Immediately remove all providers who have suspended or terminated professional licenses from the Medicaid program.
Immediately remove all providers from the Medicaid program who have professional license limitations and pose threats to the safety of beneficiaries.
Remove all providers who do not have the appropriate professional credentials required by the State Plan from the Medicaid program.