(Repeats to detach from story filed prematurely)
By Jon Lentz
WASHINGTON Aug 4 U.S. Medicaid payments to
private insurers need greater oversight to ensure that rates
are appropriate, according to a report from the Government
Accountability Office released on Wednesday.
Medicaid, administered by the states with reimbursements
from the federal government, increasingly relies on insurance
companies like UnitedHealth Group Inc (UNH.N) and Coventry
Health Care Inc CVH.N to deliver its services. In 2007 more
than $62 billion was spent on managed care.
Under a managed care model, a fixed rate is charged for a
set of services instead of a fee for every service.
But, according to the report, managed care rates for the
government's health insurance program for the poor are reviewed
infrequently or without enough data in some states.
"Medicaid could be overpaying in some cases and underpaying
in others," Senator Charles Grassley, the most powerful
Republican on the Finance Committee, said in a statement.
Grassley said the Centers for Medicare and Medicaid
Services (CMS), which oversee the program, were not adequately
checking on it.
"In a program that spends hundreds of billions of dollars,
that's a problem," he said.
"The report talks about the need to prevent overpayments,"
said Robert Zirkelbach, a spokesman for the industry group
America's Health Insurance Plans. "But the real concern in the
states today is that payments are not keeping up with rising
medical costs, and that has a potential to put at risk the
coverage beneficiaries rely on today."
Singling out the states of Nebraska and Tennessee, the GAO
report said the Centers for Medicare and Medicaid Services had
not completed a full review of Nebraska's rate setting since
2002. Tennessee received about $5 billion in annual federal
funds for rates that were not certified by an actuary or
assessed for compliance, the report noted.
The report by the GAO, the nonpartisan investigative arm of
Congress, prompted CMS to require regional offices to use a
checklist when they review the setting of rates.
The report recommended that CMS track rates in each state
and set clearer standards for rate reviews.
The GAO also recommended using information such as studies
or periodic audits to make sure the data used to set rates is
(Reporting by Jon Lentz)