Exclusion Loophole: Medicaid Managed Care

Medicaid Managed CareIn August, we discussed an OIG audit, which revealed that Medicaid providers who were terminated for cause were often able to still participate in other state Medicaid programs. Through this audit, OIG discovered that many providers were able to take advantage of a particular exclusion loophole within the Medicaid Managed Care program. Specifically, OIG discovered that 25 of the 41 states that participate in Medicaid Managed Care do not require providers to enroll in their state’s Medicaid program. The states instead permit providers to perform Medicaid managed care services based on contracts with managed care companies.

Identifying and Terminating

This loophole creates two unique problems for state Medicaid programs. First, it is much harder for a state to keep track of the providers participating in its Medicaid Managed Care program if the state does not require providers to actually enroll. In addition, if a state does not know exactly who is participating in its Medicaid Managed Care Program, then it is also difficult to search for providers to ensure that they were not terminated from participation in another state as required by ACA 6501. Second, it is very difficult for a state to terminate a provider from participating in its Medicaid program if it has no contractual relationship with that provider. In other words, it is very hard to end a relationship with someone if there was never a mutual agreement to actually begin the relationship.

Solution in Sight?

OIG recommended that CMS require state Medicaid programs to enroll Medicaid managed care providers. This would ensure that state Medicaid programs are actually able to identify and terminate providers who are terminated from participating in the federal health care programs by another state. CMS, not only heard this recommendation, but issued a Notice of Proposed Rulemaking in June 2015 which will close the loophole if finalized. Even if this loophole is officially closed, Exclusion Screening, LLC will continue to recommend that providers screen all available federal and state lists to protect their practices. This is just one of the many ways terminated providers have gamed the system. Call Exclusion Screening, LLC today at 1(800) 294-0952 for a free assessment of your needs and costs.

Ashley Hudson

Ashley Hudson, Associate Attorney at Liles Parker, LLP and former Chief Operating Officer for Exclusion Screening, LLC, is the author of this article.

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