There's a new auditor in town, and its mission is to focus on the Medicaid program - just like recovery audit contractors (RACs) focus on the Medicare program.

For more than a year (since April 2008), the Centers for Medicare & Medicaid Services (CMS) gradually has rolled out the Medicaid Integrity Program (MIP), and Medicaid integrity contractors (MICs) already have performed audits at provider sites in select states. Come 2010, the MIP will be fully operational in all states, so providers need to be prepared when their times come.

Congress developed the MIP as part of the Deficit Reduction Act of 2005 with an eye toward recovering improper payments made under the $300 billion-a-year Medicaid program. 

MIP Overview

The independent contractors, or MICs, hired by CMS will perform the following tasks as part of the MIP:

• Review provider actions to detect fraud, waste or abuse.
• Audit provider claims.
• Identify overpayments.
• Educate providers and state and local employees involved in Medicaid administration on payment integrity.

There are three types of MICs. The types and the roles they play are listed below:

• Review of Provider MICs work with CMS to analyze data and identify potential leads for prospective audits.
• Audit MICs perform on-site or "desk" audits of providers' records, depending on what CMS and the review-of-provider MICs identify.
• Education MICs provide educational services to providers and Medicaid employees based on payment issues relevant to their regions. CMS has started awarding contracts in this area.

Of these three types of contractors, the one that will be of greatest concern to providers is the audit MICs, which currently include Booz Allen Hamilton, Health Management Systems, Fox & Associates, Health Integrity and IPRO. Although their function parallels that of the RACs, audit MICs differ in a number of important ways.

RACs versus MICs

In general, MIC audits have fewer statutory checks on record review than do RAC audits. Under Medicare, RACs have a three-year limit on the period for which they can review records. There is no such limit for MICs, which have the legal authority to look as far back as records exist. Note, however, that CMS has adopted a general policy of mirroring the look-back period that each corresponding state employs.

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