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GAO-25-107770 1 (June 26, 2025)

handle is hein.gao/mdcdmagedc0001 and id is 1 raw text is: Why This Matters Key Takeaways Improper payments are payments that should not have been made, that were made in an incorrect amount, or whose appropriateness cannot be determined due to lacking or insufficient documentation. They have been a long-standing and significant problem in the federal government. The Payment Integrity Information Act of 2019 (PIIA) requires federal agencies to manage improper payments by, among other things, estimating and reporting on such payments in programs and activities that the agency has determined are susceptible to significant improper payments. The Centers for Medicare & Medicaid Services (CMS) develops an improper payment estimate for Medicaid, a federal-state health financing program for certain low-income and medically needy individuals. This estimate consists of three components: managed care, fee-for-service, and eligibility. State Medicaid programs predominantly rely on managed care to provide coverage. In 2022, managed care represented 58 percent of Medicaid spending, and just over 75 percent of Medicaid beneficiaries (about 74 million beneficiaries) received coverage through managed care. Under Medicaid managed care, states contract with managed care plans and generally pay them a fixed monthly amount per beneficiary-a capitation payment-to provide a set of covered services. Managed care plans are then responsible for paying providers for services delivered to beneficiaries and assume the financial risk if the cost of providing these services exceeds the fixed payment for the services. In contrast, under Medicaid fee-for-service, states pay individual health care providers directly for each service delivered. CMS's improper payment estimate for Medicaid managed care has been at or near 0 percent in recent years, meaning CMS found few to no errors in the payments states made to their Medicaid managed care plans. However, we have previously reported that the improper payment estimate does not account for all program integrity risks related to Medicaid managed care payments. House Report 117-389, which accompanied the Legislative Branch Appropriations Act, 2023, includes a provision for us to provide quarterly reports on improper payments. In this 10th quarterly report, we describe how CMS develops the improper payment estimate for Medicaid managed care and its other oversight efforts to identify program integrity risks related to Medicaid managed care. • CMS develops the improper payment estimate for Medicaid managed care by reviewing a sample of the payments that states made to their Medicaid managed care plans. It checks to see if those payments were made correctly based on the information in the state's Medicaid information system and managed care plan contract. Page 1 GAO-25-107770 Medicaid Managed Care Page 1 GAO-25-107770 Medicaid Managed Care

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