Medicaid Program

Issue guidance to clarify allowable financing arrangements, consistent with Medicaid payment principles. Strengthen the fiscal accountability of the Medicaid program. Develop a financial management strategic plan for Medicaid, and incorporate the use of key Medicaid data systems into its oversight of states--claims, or clarify and communicate its policies in several high risk areas, including supplemental payment arrangements:

• Strengthen the fiscal accountability of the Medicaid program. On May 25, 2007, CMS released a final rule to clarify the appropriate Medicaid State financing sources, including the use of intergovernmental transfers and certified public expenditures. The final rule also reaffirms the retention of payment requirements, consistent with the CMS oversight initiative. On June 30, 2008, Public Law 110-252, the Supplemental Appropriations Act, 2008, was enacted; this law prevents the CMS from finalizing and/or implementing the regulation until after March 31, 2009.
• Further enhance data analysis capabilities. To address previous barriers to accessing Medicaid Statistical Information System (MSIS) data, we have implemented a Web-based statistical summary, Datamart, which will support review of broad payment patterns and trends. This tool is readily available, and new financial management staff received an introduction to the use of the Datamart tools during their orientation.

Ensure waiver programs are financed appropriately. The GAO has repeatedly criticized section 1115 demonstration practices with respect to budget neutrality: programs that increase Federal financial liability beyond what it would have been without the program should not be approved.

• Review section 1115 demonstrations in accordance with program objectives --The Department of Health and Human Services Secretary has authority to allow states to test new ideas for achieving program objectives. The Department, in conjunction with the Office of Management and Budget, reviews, negotiates, and makes decisions on awarding proposals from States.
• Mitigate section 1115 demonstrations budget neutrality risk -- CMS will continue to provide States technical assistance in accordance with budget neutrality principles and seek ways to improve the process to ensure that approved programs are budget neutral.

Improve fiscal integrity and financial management

• Strengthen program integrity The Deficit Reduction Act of 2005 (DRA) created the Medicaid Integrity Program and appropriated funds to combat provider fraud and abuse and to provide effective support and assistance to States. As required by the DRA, CMS issued a comprehensive 5-year plan in July 2006 that outlined CMS?? organizational structure and initial activities to begin implementing the Medicaid Integrity Program. In December 2007, CMS contracted with eligible entities to conduct claims review, perform provider audits, and identify overpayments. These contractors are known collectively as the Medicaid Integrity Contractors. CMS continues to provide effective support and oversight to States through on-site reviews and technical assistance.