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Medicaid Program Integrity Section is Not Cost-Effectively Identifying and Preventing Fraud, Waste, and Abuse (November 2016)


The Program Integrity (PI) Section of North Carolina’s Medicaid program is charged with detecting and preventing fraud, waste, and program abuse, and ensuring that taxpayer dollars are used appropriately. The Program Evaluation Division found that due in part to a lack of access to valid and reliable claim payment data, the number of fraud referrals made by the PI Section has declined in recent years. Additionally, the lack of a formal risk assessment process and performance management information has limited the Section’s cost-effectiveness. Finally, the PI Section is neither effectively monitoring Medicaid recipient eligibility determinations nor effectively utilizing available information gleaned from reviews of eligibility determinations and medical service claims. The General Assembly should amend state law to adopt a uniform methodology to measure the severity of errors; provide incentives for county social services departments to ensure accuracy of eligibility determinations; require the identification of alternatives to increase amounts recouped from overpayments and percentage of fraud referrals accepted; develop a corrective action process for providers selected for enhanced oversight; and produce an annual performance report and work plan.

Final Report

Executive Summary



Relevant Legislation:

  • Session Law 2017-57, Section 11H.15 directs DHHS to enhance the capability of the NC Tracks Medicaid Management Information System (MMIS) to include the ability to detect and prevent fraud, waste, and abuse prior to the payment of claims.
  • Session Law 2017-57, Section 11H.20 directs DHHS to review information concerning changes in circumstances that may affect medical assistance beneficiaries' eligibility to receive benefits and make the information available to the relevant county department of social services (county DSS office); directs county DSS offices to determine if the information received from DHHS indicates a change in circumstances that may affect a beneficiary's eligibility to receive medical assistance benefits, and sets forth terms for providing notice of discrepancies to affected beneficiaries; and allows DHHS to enter into arrangements with state agencies or outside vendors to obtain information concerning individuals enrolled in Medicaid that indicates a change in circumstances that may affect the individuals' eligibility to receive Medicaid benefits

Press Coverage: