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GAO REPORT DESCRIBES MEDICAID FINANCIAL MANAGEMENT PROBLEMS AT CMS

July 10, 2006
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The Government Accountability Office (GAO) July 3 released its findings on Medicaid financial management at the Centers for Medicare & Medicaid (CMS).

The GAO study represents a follow-up to a 2002 report on the CMS' financial management system in which the GAO recommended the agency strengthen its oversight process. The GAO examined to what degree the CMS improved its ability to "identify and address emerging issues that put federal Medicaid dollars at risk" and how the agency used funds for Medicaid from the Health Care Fraud and Abuse Control account.

The GAO identified "a number of previously identified weaknesses" the CMS has not yet addressed. Specifically, it cited the CMS for failing to:

Institute mechanisms to measure how the risk of inappropriate federal reimbursement has changed as a result of corrective actions taken; Incorporate the use of the Medicaid Statistical Information System database into its oversight of states' claims or other systems projects to improve its analysis capabilities; and Develop a strategic plan specific to its Medicaid financial management activities.

The GAO is recommending that the CMS create permanent funding specialist positions and determine what systems projects can be established to enhance the agency's data analysis capabilities.

The GAO report can be viewed at www.gao.gov/new.items/d06705.pdf (http://www.gao.gov/new.items/d06705.pdf).