Evidence record

Medicaid Managed Care Improper Payment Estimate

Publication date
June 26, 2025
Source record
Original document linked
Open original reportOriginal source available

Findings

5

Recommendations

4

Overall conclusion

The GAO report highlights that while CMS's current improper payment estimates for Medicaid managed care are near zero, they do not capture all program integrity risks. CMS has taken steps to improve oversight through audits and reviews, but additional measures and data improvements are necessary to fully address improper payments and ensure program integrity.

Scope

The audit covers the development of the improper payment estimate for Medicaid managed care, including the review of payments made by states to managed care plans, audits of providers and plans, and oversight activities conducted by CMS from 2020 to 2024 across all states and the District of Columbia, with future reviews including Puerto Rico.

Findings (5)

Each finding has a stable link.

  1. F-041

    CMS has increased audits of managed care plans and providers, identifying over $33 million in overpayments, with nearly $23 million being recovered.

  2. F-040

    CMS's improper payment estimate for Medicaid managed care has been at or near 0 percent in recent years, but it does not account for all program integrity risks.

  3. F-042

    The improper payment estimate is based on reviews of a sample of payments, focusing on whether payments were made correctly based on documentation and contract terms.

  4. F-043

    Program integrity risks not captured include payments for services not provided, to ineligible providers, or with insufficient documentation.

  5. F-044

    CMS has conducted additional oversight activities such as provider audits, managed care plan audits, and state program integrity reviews, which have identified further overpayments.

Recommendations (4)

  1. R-054

    CMS should conduct a cost-effectiveness study to determine whether to include payments to managed care plans in recovery audits.

    Related finding F-041
  2. R-055

    CMS should leverage findings from state auditors and improve collaboration to enhance oversight.

    Related finding F-044
  3. R-056

    CMS should collect better data on Medicaid payments, including the source of nonfederal funding and beneficiary enrollment data across states.

    Related finding F-040
  4. R-057

    Congress should consider requiring CMS to more clearly outline methods for ensuring demonstration projects are fiscally responsible.