GAO Reports Finds CMS Inconsistent in Reviewing State Medicaid Rates

Written by Lindsey Dunn | August 09, 2010

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A recent report by the Government Accountability Office found that CMS has been inconsistent in reviewing states' Medicaid rates to ensure they are compliant and actuarially sound.

States are required to submit rate-setting methodology to CMS for approval, and CMS is to ensure the rates are developed in accordance with actuarial principles, appropriate for the population and services and certified by actuaries, according to the GAO.

The GAO reviewed documents from six of CMS's 10 regional offices and found several inconsistencies among regional offices in how reviews occurred, suggesting CMS needs to improve its oversight.

The report disclosed that CMS had not reviewed Tennessee Medicaid rates for several years and when a review did occur, it was determined the rates had been noncompliant. CMS also failed to examine the soundness of Nebraska Medicaid rates. In both instances, federal funds were directed to the state programs despite their rates not being certified as sound.

As a result of the investigation, CMS has taken steps to make its oversight more consistent. However, the GAO stated that additional steps need to be taken to prevent additional federal funds from being paid for rates that are not actuarially compliant.

Read the GAO report on Medicaid rate setting.

Read other coverage on Medicaid funding:

-  $16 Billion in Medicaid Funding for States Passes Senate, Goes to House

- Connecticut Becomes First State to Expand Medicaid Coverage Under the Affordable Care Act

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