Auditor General finds RI Medicaid disbursed over $38 million to managed care organizations for members residing in other states

STATE HOUSE – Rhode Island Medicaid (RI Medicaid) made an estimated $38.4 million in payments to managed care organizations in the period from Jan. 1, 2019, through Dec. 31, 2021, for health care coverage for members who were residing in and had enrolled in Medicaid programs in other states. Rhode Island general revenues funded approximated $16.5 million, or 43%, of these payments.

This finding resulted from the Auditor General’s recently completed performance audit titled Medicaid Capitation Paid for Members Residing in Other States. The audit report issued by Auditor General David A. Bergantino was released today by the Joint Committee on Legislative Services. The audit, which required data sharing with the federal government, was performed in collaboration with the U.S. Department of Health and Human Services’ Office of Inspector General.

The audit objective was to determine whether RI Medicaid complied with state and federal requirements for members to reside in Rhode Island to be eligible for Medicaid benefits in the state.

The report stated that the significant amounts paid for members no longer residing in Rhode Island were a clear indication that internal controls over eligibility were not operating effectively to reasonably ensure that eligibility was limited to members residing in the state. In addition, the report cited the importance of operating large federal programs like Medicaid, which provides medical benefits to one-third of the state’s population, efficiently to ensure the financial sustainability of critical benefits to its citizens.

The audit concluded that the state frequently paid monthly capitation for periods of two to three years for certain members residing in another state or territory. The report included three recommendations to improve internal controls over member residency requirements through better identification of members that have relocated out of state and timely initiation of member follow-up to terminate eligibility in accordance with federal regulations.

This audit specifically highlights the need for improved controls over Medicaid member residency to ensure that the state complies with state and federal regulations and to prevent funding of costly benefits for members ineligible for this program.

The Auditor General conducted this performance audit in accordance with Government Auditing Standards. Management’s response to the findings and recommendations, including planned corrective actions, are detailed in the report.

The full report and audit summary can be found at:

Audit Report - Medicaid Capitation Paid for Members Residing in Other States

Audit Summary - Medicaid Capitation Performance Audit Summary