Audit of Medicaid Managed Care Program in Missouri finds millions wasted on Medicaid payments for ineligible beneficiaries

Audit Graphic

Missouri State Auditor Nicole Galloway today released an audit of the Department of Social Services’ (DSS) Medicaid Managed Care Program, which found system limitations that resulted in millions of dollars in potential overpayments on behalf of ineligible participants.

“At a time when every dollar is being stretched to deliver vital services to Missourians, state government must stop wasting resources,” Auditor Galloway said. “The millions in payments for prisoners and non-Missouri residents is unacceptable.”

The Medicaid Managed Care Program provides for the delivery of health benefits and additional services to qualified individuals, including participants in MO HealthNet and the Children’s Health Insurance Program (CHIP). Program benefits most frequently take the form of per member, per month payments to managed care organizations on the participant’s behalf.

Eligibility data is managed through the Missouri Eligibility Determination and Enrollment System. When implemented in January 2014, the department could not accurately manage participant eligibility due to system limitations. To address the risk of eligible participants being wrongfully denied services, the department established a process to bypass the system and manually administer eligibility.

System updates implemented in 2016 reduced the need for that process, but the audit found the eligibility of bypassed participants is not being reviewed annually — and could remain active indefinitely. As of January 2020, this included more than 17,000 participants receiving benefits.

Additionally, in certain cases, the system identifies participants as likely being ineligible for the Managed Care program and flags them for manual review by department personnel. Until the review is complete, payments for the participant continue. The audit found the department did not always effectively track these participants to ensure completion of reviews. As of January 2020, the program had more than 2,400 participants in this status; most had been in the status for more than a year, with some for nearly three years.

The audit also identified participants who could be ineligible due to incarceration or because they no longer lived in Missouri. Over a three-year period, approximately $6.6 million in potential overpayments were issued for 2,600 participants with out-of-state addresses. During the same period, auditors identified 500 participants who were incarcerated for some length of time, but not removed as ineligible. A total of $1.65 million in potential overpayments were issued for these participants.

The audit recommended the department continue work to address system limitations and better track and address cases that need review.

The complete audit report is available here