Report: Medicaid fraud unreported

Insurers are failing to tell states about provider problems.

Despite receiving billions of dollars in taxpayer money, Medicaid insurers are lax in ferreting out fraud and neglect to tell states about unscrupulous medical providers, according to a federal report released last week.

The U.S. Health and Human Services’ inspector general’s office said a third of the health plans it examined had referred fewer than 10 cases each of suspected fraud or abuse to state Medicaid officials in 2015 for further investigation. Two insurers in the program, which serves low-income Americans, didn’t identify a single case all year, the report found.

Some health plans terminated providers from their networks for fraud but didn’t inform the state. The inspectors said that could allow those doctors or providers to defraud other Medicaid insurers or other government programs in the same state.

In addition, some insurance companies failed to recover millions of dollars in overpayments made to doctors, home health agencies or other providers. The inspector general said insurers stood to benefit financially from this because higher costs can justify increased Medicaid rates in the future. (The report didn’t name specific insurers or states.)

Medicaid plans “are required by law to find fraud and abuse and to share information with states,” said Meridith Seife, a deputy regional inspector general in New York and a co-author of the report, which was released Thursday. “We are concerned anytime we see evidence that managed-care organizations are not doing that in a rigorous way. There’s a lot of taxpayer dollars at stake.”

In general, Medicaid has struggled for years with poor oversight and billions lost to improper payments, drawing regular scrutiny from federal auditors but little improvement.

Health insurers serve about 55 million Medicaid patients across 38 states, and play an increasingly vital role in running the giant public insurance program.