Maryland Department of Health Medical Care Programs Administration Managed Care Program Audit Report
Learn how the AI-generated research projects were createdOverall Conclusion
MDH’s corrective actions addressing the identified audit issues are considered sufficient to address all audit issues.
Source Document
Audit Scope
The audit scope covered a fiscal compliance review of the Maryland Department of Health (MDH) – Medical Care Programs Administration (MCPA) focused on the Managed Care Program (HealthChoice) for the period April 1, 2019 through March 31, 2022. It examined the MCPA’s monitoring of enrollment and disenrollment of Medicaid recipients in MCOs, the calculations of MCO capitation rates, and the oversight and processing of capitation and related payments. The audit included the use of MMIS II data, DPSCS incarceration data for cross-checking incarcerated individuals enrolled in HealthChoice, and the independent verification by a private accounting firm and a State university to support capitation rate calculations. The audit explicitly excluded procedures and controls over MCPA’s primary functions beyond HealthChoice, and excluded MDH’s other units and programs (e.g., Behavioral Health Administration’s Administrative Service Organization, the Maryland Pharmacy Program) which are reviewed in separate audits. The period under review spans April 1, 2019 to March 31, 2022.
Key Findings Summary
Finding 1 – Capitation Rate Calculations: MCPA procedures were not sufficiently comprehensive to ensure the validity of MCO-reported expenditure data used in the capitation rate calculation.
Finding 2 – MCPA did not have comprehensive procedures to ensure that ineligible costs reported by the MCOs were excluded from the capitation rate calculation.
Finding 3 – Improper Medicaid Payments: MCPA did not have an effective process to identify capitation payments to MCOs for incarcerated individuals, resulting in approximately $14 million in improper payments during fiscal years 2019 to 2022.
View the Findings tab to see all 4 findings
AI-Assisted
AI Scope Summary
Assess the adequacy of MCPA's capitation rate calculation processes, identify ineligible and improperly paid costs (including incarcerated individuals and carved-out services), and evaluate the effectiveness of internal controls and corrective actions.
AI-Generated Insight
This audit highlights substantial governance and data integrity gaps in MDH's management of HealthChoice capitation payments, including inadequate validation of MCO-reported expenditures, insufficient controls to exclude ineligible costs, incomplete tracking of incarcerated individuals leading to substantial improper payments, and lack of timely investigation into newborn delivery supplemental claims. The agency has since implemented corrective actions and worked with independent auditors to address data quality concerns, demonstrating progress toward more accurate capitation rate setting and stronger financial oversight that could improve Medicaid program integrity and cost containment.