Providers Terminated From One State Medicaid Program Continued Participating in Other States

Prior to the passage of the Affordable Care Act (ACA) in 2010, providers terminated from participation in one State’s Medicaid program for committing acts of fraud, waste, and abuse could potentially enroll in or continue participation in another State’s Medicaid program. Section 6501 of the ACA required effective January 1, 2011, that each state must terminate the participation of a provider from its State Medicaid program if that provider’s participation was terminated from Medicare or from another State Medicaid program. States continue to face challenges meeting the intent of the legislation for several reasons. First, there is no comprehensive database available for identifying all State Medicaid provider terminations that can be accessed publicly. Second, states are having difficulty differentiating terminations from administrative actions as reported by each state’s Medicaid agency. Lastly, twenty-five out of forty-one states did not require providers in managed care programs to be directly enrolled with the State Medicaid program, thus the provider was not enrolled and therefore, could not be terminated by the state.

The findings from the review conducted by the Office of the Inspector General (OIG) and featured in the Semiannual Report to Congress, revealed twelve percent of providers terminated for cause in one state in 2011 were still participating, and providing services in other State Medicaid programs in 2014. Medicaid programs paid $7.4 million to ninety-four providers for services performed after the provider was terminated from the initial State Medicaid program for cause. The OIG’s report identified a significant need for the Centers for Medicare and Medicaid Services (CMS) to strengthen the integrity of the Medicaid program across all states to capture these provider terminations more efficiently.

The OIG made the following recommendations to CMS :

  1. Require each State Medicaid agency to report all providers terminated for cause;

  2. Work with the states to develop uniform terminology to denote terminations for cause;

  3. Require State Medicaid programs enroll all providers participating in Medicaid Managed Care programs; and

  4. Provide a guidance statement to clarify termination from a State Medicaid program is not contingent on a provider’s active license status.

 Sources:  Providers Terminated From One State Medicaid Program Continued Participating in Other States. (August 2015).  Affordable Care Act § 6501. Social Security Act §1902(a)(39). 42 U.S.C. §1396a(a).