Medicaid’s Improper-Payment Mess

Source: Carolyn L. Yocom, “Medicaid: CMS Has Taken Steps, but Further Efforts Are Needed to Control Improper Payments, Testimony Before the Subcommittee on Oversight and Investigations, Committee on Energy and Commerce, House of Representatives, January 31, 2017

There are at least a dozen solid reasons why New Mexico should not have expanded Medicaid under Obamacare, but earlier this week, an analyst from the Government Accountability Office raised a seldom-discussed issue with the state-federal healthcare program for “the poor.”

Carolyn L. Yocom, the GAO’s director of health care, testified before Congress that in “fiscal year 2016, improper payments totaled an estimated 10.5 percent … of federal Medicaid expenditures.”

D.C. considers payments improper when federal “funds go to the wrong recipient,” a recipient “receives the incorrect amount of funds,” there is no documentation “to support a payment,” or a recipient uses “funds in an improper manner.” Despite the oversight entities depicted in the graphic above, Medicaid’s improper payments are rising, from $29 billion in 2015 to $36 billion in 2016. (If Yocom has added states’ share of Medicaid spending, the total figure would have reached $60 billion.)

The GAO has “identified four key program integrity issues for the Medicaid program”:

* Eligibility determination is dysfunctional, with “gaps” in government’s ability ensure that only appropriate individuals are enrolled. In addition, beneficiaries have “payments made on their behalf concurrently by two or more states” and payments are made “for claims that were dated after a beneficiary’s death.”

* Oversight of managed care, which handles over “half of all Medicaid beneficiaries,” is weak. The improper-payment rate for providers is “currently less than one percent,” but the estimate “is based on a review of the payments made to managed care organizations and does not review any underlying medical documentation.”

* Ineligible providers are allowed to participate in the program. Bureaucrats access information that is “fragmented across 22 databases managed by 15 different federal agencies to screen providers,” but the databases “did not always have unique identifiers.” As a result, “providers with suspended or revoked licenses, improper mailing addresses, or deceased providers” are paid.

* Individuals are enrolled in Medicaid as well as Obamacare’s subsidized exchanges. Despite “procedures designed to prevent duplicate coverage, it [is] occurring.” The Centers for Medicare & Medicaid Services “has not developed a plan for assessing whether … procedures are sufficient to prevent and detect duplicate coverage.”

With Medicaid “serving” an estimated 44 percent of New Mexico’s population by the end of the current fiscal year, one can only wonder how many taxpayer dollars the program squanders in the Land of Enchantment.

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One Reply to “Medicaid’s Improper-Payment Mess”

  1. Last month the USDOJ reached a settlement agreement w/ dental Medicaid provider HQed in Texas, “MB2”, for $8.45 Mil. Naturally, this paltry amount is pennies on the dollar for their hundreds of millions of dollars in dental Medicaid billings. They operate under a wide variety of multi-branded clinic names, inclusive of “Peppermint Dental”, which functions in ABQ. Some small % of this settlement is destined to go to the State of NM.

    Mechanisms of MB2’s interstate dental Medicaid alleged fraud schemes are well published in the public domain. Unfortunately, regulatory oversight is abysmal for taxpayer money. And when caught, violators walk away w/ a wrist-slap, to continue business as usual. Nothing changes, because fines are such a small part of the operational overhead, of Medicaid fraud as a business model. Governmental legal filings are almost always limited to civil (not criminal) charges. Thus, crooked Medicaid cheats laugh at this broken program, all the way to the bank.

    Michael W Davis, DDS
    Santa Fe, NM

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