CMS’ measures of Medicaid errors flawed, MACPAC says

The way HHS measures payment errors could lead to widespread misunderstanding about the nature and extent of fraud in the Medicaid program, according to the Medicaid and CHIP Payment and Access Commission.

At its December meeting, members said the payment error rate measurement provides policymakers and the public with too little, and possibly misleading, data about how and why errors occur. Errors in payments to providers were much higher in fee-for-service compared to managed care, according to the most recent HHS Agency Financial Report. The error rate for fee-for-service Medicaid was 16.3% compared with just 0.12% for managed-care Medicaid.

But this year’s report was significant because it’s the first year that Medicaid and CHIP estimates incorporated errors based on eligibility since the Affordable Care Act mandated substantial changes in 2014. The report found an eligibility-based error rate of 8.36% for Medicaid, which led some commentators to say that the program is rife with fraud.

An eligibility error “does not mean in any way, shape or form” that a Medicaid beneficiary has committed fraud or that a provider is billing for a service they didn’t provide, said MACPAC member Dr. Christopher Gorton, a consultant and former president of public plans at Tufts Health Plan. Errors are often due to the complexity of reporting and the administrative work required to comply with the rules, he said.

Most Medicaid and CHIP payment errors are due to states’ failure to comply with provider screening, enrollment and national provider identifier requirements, according to the HHS report. Eligibility errors usually result from a lack of information to determine eligibility such as proof of income.