States don’t notify CMS of Medicaid provider sanctions as require by law and regs

States regularly fail to notify the HHS Office of Inspector Generalwhen they have expelled health care providers from their Medicaidprograms for incompetence, fraud and other reasons that would prohibitthem from receiving federal reimbursements, according to federalinvestigators.  The lack of notice keeps the providers off OIG’s reimbursementexclusion list, making it easier for barred providers to work in otherareas of the country and continue to receive federal funds, accordingto the report.

Federal investigators surveyed states todetermine how often Medicaid programs sanction a provider in a way thatwould place them in OIG’s exclusion database. Reasons for exclusioninclude fraud convictions, patient abuse, licensing board sanctions anddefault on federal education health loans. No federal payments can bemade for any services that an excluded provider performs, orders orprescribes, according to federal law. Forty-seven states responded tothe survey.

OIG found that 61% of the 4,319 sanctions imposed bystate Medicaid agencies in 2004 and 2005 were not on the federal list.States that had taken action against more than 100 providers tended tohave high federal match rates with the list. Alabama, Louisiana andTexas had the highest match rates, with more than 80% of the providerssuspended from their state Medicaid programs listed on the nationaldatabase. New York and Florida, the two states that sanctioned thelargest number of providers, had the lowest matching rates of 21% and9%, respectively. About a dozen states, including California andMichigan, submitted incomplete data or reported not sanctioning anyhealth care providers in 2004 and 2005.

Many state officials expressed uncertainty about the kind of information that was supposed to be forwarded to OIG. CMSspokesperson Jeff Nelligan said the agency will “strive to reduce thebarriers that may currently exist” in order to increase the number ofreferrals from the states.