State Medicaid agencies are required to suspend payments for healthcare items and services when there is a credible allegation of fraud against the provider, unless "good cause" exists not to suspend payment.
Using payment suspensions, when appropriate, is important to protect Medicaid funds. Payment suspensions, based on credible allegations of fraud, can swiftly stop the flow of Medicaid dollars to providers defrauding Medicaid. A payment suspension can remain in place throughout the law enforcement investigation, and potential prosecution of the healthcare fraud case.
The Office of Inspector General for the United States Department of Health and Human Services collected self-reported individual case data for credible allegations of fraud, payment suspensions, and "good cause" exceptions during Federal fiscal year (FY) 2014 from Medicaid agencies. The OIG also surveyed both Medicaid agencies and Medicaid Fraud Control Units regarding challenges and benefits of payment suspensions that are based on a credible allegation of fraud.
Most Medicaid agencies (41 of 56) reported imposing 10 or fewer payment suspensions during FY 2014. Medicaid agencies reported significant challenges associated with imposing payment suspensions. These include, (1) demonstrating sufficient evidence to support payment suspensions when providers appealed, (2) not jeopardizing law enforcement investigations when providers appealed, and (3) sustaining payment suspensions through lengthy fraud investigations, without unintentionally driving innocent providers out of business.
Medicaid agencies often applied "good cause" exceptions, during which payment suspensions are not suspended, while law enforcement investigated a credible allegation of fraud against a provider. Additionally, Medicaid agencies reported taking actions that improved their processes for payment suspensions, including how they handle fraud allegations and collaborate with law enforcement.
The OIG recommends that the Centers for Medicaid & Medicare Services (CMS) provide additional technical assistance to help Medicaid agencies fully utilize Medicaid payment suspensions as a program integrity tool.
Visit https://go.usa.gov/xRF9C for additional information on this report.