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Legislative audit finds OIG for Medicaid failing to provide adequate oversight, proposes major governance changes
Summary
A legislative audit concluded the Office of Inspector General for Medicaid services has not provided sufficient oversight of the state's $5 billion-plus Medicaid program, and auditors recommended structural reforms ranging from new governance to dissolution of the office.
Legislative auditors presented a performance audit that sharply criticized the Office of Inspector General (OIG) for Medicaid services, saying it has not adequately fulfilled its legislative oversight mandate.
Audit managers said the OIG—s work is heavily weighted toward compliance and claims audits and that only a small portion of its effort examines Medicaid performance measures such as patient outcomes, program effectiveness, or the activities of accountable care organizations (ACOs). The auditors said coordination with ACOs does not substitute for independent oversight and noted that five of nine audited years did not return the original state investment in program-integrity recoveries.
The auditors also raised concerns about the OIG's public reporting: repeated measures and shifting methodology reduced trust in the office—s published results. The audit offered three governance options: (1) keep the OIG but add an external governing body to provide oversight; (2) keep program integrity in OIG and move the audit function to an independent office such as the Office of the Legislative Auditor General; or (3) dissolve the OIG and redistribute program integrity and audit functions across other agencies.
Committee members pressed auditors on enforcement and accountability mechanisms. Auditors said OIG lacks a governing body and that earlier recommendations from a 2018 audit remain largely unimplemented. Representative McPherson stated he has a bill file open proposing the option to dissolve or restructure the OIG and move functions to other oversight bodies.
Next steps: Committee members requested the OIG appear at a future meeting to respond and to provide a plan for implementing outstanding recommendations.
