Government Watchdog Warns Of Medicaid Oversight Gaps

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Dive Brief:

• A government watchdog is ringing the alarm on potential quality and access issues in Medicaid managed care, when states contract with private companies to administer the care of Medicaid beneficiaries.
• Rates of Medicaid beneficiaries appealing care denials and filing grievances vary widely from state to state, which could signal access problems, according to the Government Accountability Office’s review of the first year of data from states’ annual managed care reports.
• Despite regulators’ efforts to get a clearer view of the data, the GAO found the CMS doesn’t require states to report data on outcomes or care denials, and has made “delayed” progress on plans to analyze the information and make it public. Those gaps could stymie efforts to improve Medicaid managed care, which covers the majority of Medicaid members.

Dive Insight:

In Medicaid managed care, states pay private health insurers a flat rate per enrollee, giving plans an incentive to control the medical costs of their members by, for example, investing in preventative care. However, it also creates an incentive for them to deny or limit medical services to pocket a larger portion of the healthcare dollar.

To dissuade that, Medicaid members can appeal denials of service and file grievances with state regulators. Starting in 2022, states were required to report some of that data to the CMS. However, the CMS’ oversight is limited, and it hasn’t made that data publicly available, hampering regulators’ ability to get a clear national picture quality and access issues, the GAO said.

That’s a concern due to Medicaid managed care’s scale: 70% of Medicaid enrollees receive services through managed care plans, according to the GAO.

The GAO’s report is not the first to raise questions about the quality of Medicaid managed care. More than half of Medicaid enrollees report having experienced a problem with their coverage in the past year, according to a KFF survey published in November.

Medicaid enrollees are more likely than people on Medicare or employer-sponsored coverage to report negative outcomes from insurance problems. And, though they report fewer problems related to cost than people with other types of insurance, Medicaid enrollees report more problems with prior authorization and provider availability, the survey found.

To ameliorate quality and access concerns, the GAO is recommending that the CMS require states to report on appeal outcomes and the number of denials, and implement actions to analyze, use and publicly post appeals and grievances data.

Regulators agreed with the GAO’s recommendations. In comments on GAO’s findings, the HHS also said a number of recent rules would improve covered services, including one that (if finalized) would establish a national maximum wait time for appointments, and another final rule that accelerates the timeline of prior authorization decisions.

Better quality oversight is especially important as state payments to managed care organizations have increased amid rising patient acuity. A number of states have also retroactively hiked Medicaid payments to plans as a result of shifting member rolls from eligibility checks following a COVID-19 era pause.