In its release of October updates to its work plan, the Department of Health and Human Services Office of Inspector General (OIG)  includes multiple items intended to find possible savings in state Medicaid programs.

The OIG self-describes the work plan‘s utility to, “…set[s] forth various projects including OIG audits and evaluations that are underway or planned to be addressed during the fiscal year and beyond by OIG’s Office of Audit Services and Office of Evaluation and Inspections.”

October updates include attention to Medical Loss Ratio (MLR) utilization in state Medicaid managed care contracts, concerns with fraud and waste in non-emergency medical transportation (NEMT), and review of state use of screening for behavioral health needs among new adult Medicaid managed care enrollees.

Ongoing scrutiny on state Medicaid programs has potential to cost states federal Medicaid funding. OIG audits or targeted reviews could find payment for disallowable services or lead to policy changes that require states to amend their programs to be more restrictive. Attention to NEMT could cause additional barriers to accessing an already challenging service to coordinate and access. The work plan indicates that the OIG has concern with fraudulent, wasteful, or abusive use of NEMT. Both nursing home residents and individuals in community-based settings use NEMT to travel to medical appointments. Recommendations put forth from the OIGs review could impose additional burdens on scheduling and accessing NEMT for all individuals and their providers of long-term services and supports.

With regard to attention to MLR, states have latitude to administer their managed care programs and can decide whether they wish to hold managed care plans to an 85% MLR. States use MLR clauses in their contracts to assure that MCOs are attributing an appropriate percentage of their capitation payments to medical care, services, and quality improvement projects for beneficiaries. The OIG is seeking to better understand savings based on states that do not use this standard and states that do not require MCOs to remit differential payments when their MLR is less than 85%. This is not anticipated to have a direct effect on providers or enrollees, though could lead to states amending MCO contracts.

LeadingAge will continue to monitor the work of OIG and provide updates when relevant.