Medicaid Integrity Audits –

Is Your Organization on "The List"?

By Mitchell L. Kalkhof, CPA, CFE

Malin, Bergquist & Company, LLP

The Medicaid Integrity Program was established through the passing of the Deficit Reduction Act of 2005. This legislation directed the Centers for Medicare and Medicaid Services (CMS) to enter into contracts with external firms to provide certain services for the Medicaid program. The firms to provide these services, referred to as Medicaid Integrity Contractors (MIC), are responsible for reviewing Medicaid provider services, auditing claims, identifying overpayments, and educating providers. The MIC audits are going to being conducted under Generally Accepted Government Auditing Standards.

In September 2009, CMS contracted with Health Integrity to serve as the MIC to perform these required Medicaid audits in Regions III and IV.  The state of Pennsylvania is included in Region III. There has already been an initial list of PA Medicaid providers selected to be audited but this list will not be published.

If your organization is a provider enrolled in the Medical Assistance (MA) Program, you are eligible to be selected for a Medicaid Integrity Contractor audit. Providers are going to be selected based upon data analysis performed by other CMS contractors or as a result of referrals made by State agencies.  Organizations selected for audit will receive a notification letter that specifies the timeframes for producing the requested documentation.

Management should be assessing their preparedness for these Medicaid audits and what potential business risks they may present to their organization. Formal policies and internal controls should be in place to ensure compliance with the regulations of the MA program. Organizations not accustomed to external monitoring often tend to struggle with meeting the documentation standards.

The Pennsylvania Department of Public Welfare has issued a Provider “Quick Tip” with additional information on these upcoming audits. This “Quick Tip” may be viewed at this link.

Mitchell L. Kalkhof, CPE, CFE is a member of the Not-for-Profit/Tax Exempt Organizations Group of the public accounting firm of Malin Bergquist, of Erie and Pittsburgh, PA, and which serves 150 non-profit clients each year. Contact him at 814.454.4008 or at mkalkhof@malinbergquist.com.