From the U.S. Government Accountability Office, www.gao.gov Transcript for: Data Challenges Contribute to Billions in Medicaid Improper Payments Description: Audio interview by GAO staff with Carolyn Yocom, Director, Health Care Related GAO Work: GAO-17-173: Medicaid: Program Oversight Hampered by Data Challenges, Underscoring Need for Continued Improvements Released: February 2017 [ Background Music ] [ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and information from the U.S. Government Accountability Office. It's February 2017. Federal Medicaid administrators rely on state-reported data for oversight activities, such as determining whether payments are made correctly. In 2016, Medicaid payment errors increased to an estimated $36 billion, leading many to question the quality of the data. A team led by Carolyn Yocom, a director in GAO's Health Care team, recently looked at the quality of state-reported Medicaid data. Jacques Arsenault sat down with Carolyn to talk about what they found. [ Jacques Arsenault: ] We're talking about a huge amount of money in terms of Medicaid payment errors here, and it seems like the problem's only getting worse. How does the quality of data that Medicaid gets affect their ability to oversee the program? [ Carolyn Yocom: ] You really can't oversee a program if you don't know where your dollars are going, and that unfortunately is much of the case in the Medicaid program. The problems can be looked at from various angles, but some of the key areas where there are concerns, one has to do with providers themselves. Are they eligible for the program? Are they providing services to eligible individuals? And are they providing services that are allowed under the Medicaid program? A second area is managed care, where the state's paying funds to a managed care organization, and that organization provides services to individuals. We know what the payments to that managed care organization is, but again, we don't know the services that are being delivered. We don't know if there's a good value for the services being received. And then lastly, there are payments that Medicaid makes that are not based on individuals but are provided to institutions or to other types of facilities. And these are not well-documented or known at all. [ Jacques Arsenault: ] So can you talk about some of the main problems with the data sources? [ Carolyn Yocom: ] There's really three big problems. One, the data aren't complete. When we were talking about the payments made to organizations, we don't have a full accounting of what those payments are, how much, or even where they go. With accuracy, that's another issue where we don't have reliable data on the providers themselves, whether they are providers in good standing and whether the services that they provided are in keeping with the statute. And lastly, timeliness. There were 37 states whose data were late by as long as 6 weeks, and then some of which takes up to 3 years to actually be fully validated. If you're talking about trying to prevent improper payments, that's way too long. [ Jacques Arsenault: ] So why is this such a big problem for Medicaid? [ Carolyn Yocom: ] One of the things that really is unusual about the Medicaid program is how much flexibility it affords the states. Since the beginning, the concept of the Medicaid program was that states knew best what their citizens needed, and what that has resulted in is a great deal of diversity across the states in how the program operates. This means when you're trying to look at a national level or even when you're trying to oversee the program from a federal level looking at a single state, there's a lot of variety and a lot of different activities going on. So oversight is very complicated by that enormous flexibility that's within the program. [ Jacques Arsenault: ] It almost seems like that variety and uncertainty kind of leaves the space for misinterpretation or different things that would lead to improper payments. [ Carolyn Yocom: ] It does, and it's a real trade-off because you do have to balance that flexibility against the need to make sure that you're paying the right people for the right services. The other danger in a program integrity environment is providers can move. So they can get identified in one state, and if they are a bad actor, then move to the next state. So those information systems have to connect to ensure that we aren't continuing to pay actors who are not invested in helping people but just invested in profits. [ Jacques Arsenault: ] So then what is GAO recommending? [ Carolyn Yocom: ] GAO is recommending that CMS focus in on a few areas. And in particular, because improper payments is such a huge problem in the Medicaid program, GAO's recommendation focuses on starting first with those variables that are most important to ensuring program integrity, and improving them, and making sure that states are submitting those as accurately and in as timely a manner as possible. [ Jacques Arsenault: ] So finally, Medicaid provides some really critical health services, but we're also talking about a lot of taxpayer dollars here. What would you say is the bottom line of this report? [ Carolyn Yocom: ] The bottom line is there's no substitute for good information. This is a really important program. Almost 70 million Americans rely on it. They quite often are people without income or resources or with very high medical needs, and they need the care and services that it delivers, but we as taxpayers also need to be sure that the money we're spending is going to address those needs and it is going in the most efficient and effective way possible. [ Background Music ] [ Narrator: ] To learn more, visit GAO.gov and be sure to tune in to the next episode of GAO's Watchdog Report for more from the congressional watchdog, the U.S. Government Accountability Office.