The Office of the Inspector General of Medicaid Services has a state-mandated mission to guard against instances of “fraud, waste, and abuse,” legislative auditors wrote in their report, but they concluded the office’s leadership has not “made adequate effort” toward those goals.
Lawmakers reviewed that audit on Thursday, when legislative auditors presented their findings to the Legislative Audit Subcommittee. Auditors had a slew of recommendations to address their concerns and improve oversight and accountability for the state’s Medicaid program.
Those recommendations included three policy options for lawmakers to consider: creating an oversight board, relocating audit responsibilities, or “dismantling the office entirely.”
The Legislature first created the Office of Inspector General in 2011 — after the Office of the Legislative Auditor General recommended its creation — to oversee the state’s Medicaid program. The legislative audit released Thursday is a follow-up to an initial audit of the Office of Inspector General of Medicaid Services that was first published in 2018, which found that the office “was not assessing risk or completing performance audits of Medicaid and managed care plans, and that the amount of taxpayer dollars recovered should be higher.”
Since that 2018 audit, however, legislative auditors wrote in their report that the Office of Inspector General leaders have “not made adequate effort to improve office performance and oversight of Medicaid’s $5 billion budget, and a change in governance and accountability are needed to improve the effectiveness of the office.”
“Today we find that Medicaid risks continue to increase” due to the program’s growth, legislative auditors wrote in the report. “The (office) has not fulfilled its mandate for Medicaid oversight as envisioned and has not maximized its value. Therefore, this report’s finding compels us to notify the Legislature that this model for Medicaid oversight is not working and major changes are needed.”
Key findings listed by legislative auditors in their report include:
- Leadership over the Office of Inspector General of Medicaid Services “has failed to adequately prioritize high-impact audits and therefore has been delinquent in fulfilling its duties.”
- The office “does not conduct annual planning, limiting its ability to provide full Medicaid coverage.”
- Office leadership has “provided insufficient oversight of accountable care organizations, in which other states have found concerning practices.”
- The office “has failed to improve its office governance and impact.”
- The office has “inconsistent performance practices and some low performance outcomes.”
- The office has operated “under a limited oversight structure.”
Auditors noted that while the office “often performs audits of Medicaid policy and compliance,” like billing practices, only 20% of its audits have focused on “performance or outcomes.” That’s important, auditors wrote, because the Legislature authorized the office to “oversee Medicaid operations and funding, but this has largely remained unaddressed.”
The inspector general “should have been strategically prioritizing audits with the greatest impact on recipients and funds,” auditors wrote, like the resources they were devoting to rooting out fraud and abuse. “Not doing so has left the state open to financial exposure even after we recommended the office improve its approach to reviewing Medicaid” in 2018.
Overall, legislative auditors wrote that they believe the office’s “lack of oversight has resulted in a less efficient and effective program.”
“Utah needs an improved model for the state’s Medicaid program,” they wrote.
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