Terminated by Medicaid in One State? No Problem (just apply in another state)

MontanaM RosenBy Michael Rosen

Prior to the passage of the Affordable Care Act, if a provider was terminated from Medicaid enrollment/eligibility in one state it could easily slip through the cracks and enroll in another state. Most states did not share or have access to a centralized database of terminated Medicaid providers. Obviously, this is not good for ferreting out fraud and preventing a terminated provider from hopping state lines and enrolling in another state.

Section 6501 and others were designed to curb this chink in the armor and to prevent, by centralizing, a terminated Medicaid provider from enrolling in another state. In fact, CMS was challenged under the Act to create a better mousetrap (database) and processes at the state Medicaid Fraud Control Units to meet the mandates of the ACA.

That was 2011. Now it is 2015.

Not much has changed or even progressed in that period of time, according to a new OIG report. The OIG not only found gaps, but has also formulated recommendations that CMS agreed to implement and address.

Let’s look at what the OIG found:

The OIG recognized that CMS had taken some steps to address this pervasive problem, but it is still not redressed. In February 2011, CMS issued regulations that required states to implement categorical risk-based screening of newly enrolled Medicaid providers and to re-validate all current Medicaid providers under new requirements created under the Affordable Care Act.

The idea was simple, the tools provided, but the execution by states was poor.

[bctt tweet=”Terminated by Medicaid in One State? No Problem (just apply in another state) @mrosen64″]

The HHS OIG, Daniel Levinson, conducted an audit and found that:

  1. Continued participation from terminated providers in other state’s Medicaid programs was still occurring in 2014.
  1. 12% of the 2,539 providers terminated for cause in 2011 continued participating in another state’s Medicaid program as late as January 2014.
  1.  States were still confused on terminology and identifying all terminations for cause and differentiating these terminations from other administrative actions that a state reports.
  1.  Further complicating a state’s ability to terminate providers is the challenge created by those states that do not enroll providers in participating in its Medicaid managed care organizations (MCO).
  1. Finally, states were confused regarding whether an active licensure status from the state licensing board precluded terminating for cause.

OIG Recommended and CMS Agreed to the following in order to fix this problem:

  1.  CMS work with states to develop uniform terminology to clearly denote for cause terminations.
  1.  Require that state Medicaid programs enroll all providers participating in Medicaid managed care, and
  1.  CMS furnish guidance to state agencies that termination is not contingent upon the provider’s active licensure status at the state licensing board.

For a more detailed review of the Report click here.


This is very troubling since a provider can be terminated for cause in one state Medicaid agency, but simply move to another state, which does not check or have good processes in place to prevent enrolling such terminated provider into their state. Effective compliance monitoring includes a combination of monthly nationwide (state and federal) exclusion monitoring. If your plan does not include such searches, you may be enrolling, hiring, contracting with and/or submitting bills for federal healthcare program dollars of an excluded and/or terminated provider.

Michael Rosen is co-found of Provider Trust and a frequent contributor to the Provider Trust blog.



  1. Realistically, what percentage of providers can surive on Medicaid and not Medicare patients alone?

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