Attainable Benefits of the Medicaid Management Information System Are Not Being Realized

Medicaid management information systems are integrated computer processing operations used by the States to process and pay bills for health care services provided to Medicaid recipients, store and retrieve service and payment data for use in monitoring and analyzing program activity, and generate management reports. A review of the Medicaid management information systems in three States--Ohio, Michigan, and Washington--indicated that the States have not realized the full potential of their systems.

Although approved by the Department of Health, Education, and Welfare (HEW), the systems do not meet requirements of the law, implementing regulations, or HEW administrative requirements. Some systems are underdeveloped and/or underused, and as a result, neither the Federal Government nor the States are realizing all benefits expected. HEW lacks information on the cost of the systems and cannot effectively monitor or control administrative expenditures because of limitations in cost-reporting requirements. HEW has not required the States to develop or report the cost of operating the systems in detail. The systems' database is often incompatible with the mechanized payment systems used by Medicare carriers and hinders timely, accurate, and mechanized exchange of payment data.