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recent report from the U.S. Office of Inspector General identifies state Medicaid agencies that outsource administrative functions offshore and state regulations or other requirements pertaining to this practice. According to the report, no federal regulations prohibit offshore outsourcing of these functions and the Centers for Medicare and Medicaid Services (CMS) has issued guidance stating that Medicaid agencies may provide payments to contractors operating offshore for tasks that support Medicaid program administration. The Health Insurance Portability and Accountability Act (HIPAA) requires agencies to have agreements in place with contractors to protect personal health information.
Of the 56 agencies (including state, U.S. territory, and Washington D.C. agencies) surveyed in the report:
- 41 agencies (including Connecticut’s) do not outsource Medicaid administrative functions offshore and do not have requirements addressing this practice;
- nine agencies have requirements that allow it with few restrictions, and of those agencies, seven (including Massachusetts’ and Rhode Island’s) currently outsource some Medicaid administrative functions offshore;
- two agencies (New Jersey’s and Missouri’s) may outsource offshore only in limited circumstances; and
- four agencies (Arizona’s, California’s, Minnesota’s, and Ohio’s) have requirements prohibiting it.
