Seema Verma, Administrator, Centers for Medicare & Medicaid Services
The Medicaid program has grown from $456 billion in 2013 to an estimated $576 billion in 2016, largely fueled by a mostly federally financed expansion of the program to more than 15 million new working age adults. For these adults, the estimated cost per enrollee grew about 7 percent from FY2017 to 2018, compared to about 0.9 percent for other enrollees. With this historic growth comes a commensurate and urgent responsibility by CMS on behalf of the American taxpayers to ensure sound stewardship and oversight of our program resources. While the primary responsibility for ensuring proper payments in Medicaid lies with states, CMS plays a significant role in supporting states’ efforts and holding them accountable through appropriate oversight and increased transparency.
That’s why the Trump Administration has proposed numerous changes to the Medicaid program such as improving overpayment collection when states pay for ineligible beneficiaries, streamlining provider terminations to remove bad actors, and consolidating provider enrollments in Medicaid and the Children's Health Insurance Program (CHIP) to improve efficiency.
One year ago we took a significant step to address these challenges when we released a Medicaid Program Integrity Strategy based on the three pillars of flexibility, accountability and integrity. Our strategy seeks to reduce Medicaid improper payments across states to protect taxpayer dollars. To do so, the strategy includes stronger audit and oversight functions, increased beneficiary eligibility oversight, and enhanced enforcement of state compliance with federal rules. As we mark the first anniversary, we can point to several initiatives that are improving transparency and accountability for the Medicaid program, enabling increased data sharing and more robust analytic tools, and reducing Medicaid improper payments across states.
CMS Information Bulletin: Oversight of State Medicaid Claiming and Program Integrity Expectations. This bulletin, issued last week, sets out CMS’ higher expectations for states to ensure the accuracy of eligibility determinations and federal funding at the appropriate matching rate to improve accountability for Medicaid program integrity performance. The bulletin is particularly important for states that have expanded or may be considering expanding their Medicaid programs to the new adult group, which is financed with 90% or more in federal funding. CMS will issue additional guidance to help states improve their program integrity performance.
Disallowing Unallowable Claims of Federal Funding. CMS closely monitors how states draw down and expend federal Medicaid funding to ensure it complies with all applicable laws and regulations. When states do not voluntarily return federal funds associated with unallowable claims, CMS can recover them by issuing a disallowance. Over the last 18 months, the Trump Administration has worked through an inherited backlog of potential disallowances where CMS, Office of Inspector General (OIG), or state oversight activities identified potentially unallowable state claims. We are taking action to resolve a number of these potential disallowances. Since 2017 we issued approximately $900 million in disallowances. We are committed to achieving more expeditious resolution of these issues to prevent new backlogs from developing in the future, thereby ensuring federal funds are repaid in a timely manner.
Increased Audits and Oversight. We are conducting eligibility audits of state beneficiary eligibility determinations in states identified as high risk by previous OIG and state audit findings (beginning in California, New York, Kentucky, and Louisiana) to hold states accountable for more accurate beneficiary eligibility determinations. In addition, we are working with all states to implement the revised Medicaid Eligibility Quality Control (MEQC) program, which allows for continuous oversight of states’ eligibility determinations during their off-cycle Payment Error Rate Measurement (PERM) years. We are also auditing Medicaid managed care plans’ financial reporting and Medical Loss Ratios (MLRs) to ensure plans aren’t being overpaid, including reviews of high-risk vulnerabilities identified by the Government Accountability Office (GAO) and OIG. As of December 31, 2018, prior CMS efforts led to CMS recovering $9.63 billion from California in relation to our efforts to ensure appropriate payments to managed care plans specific to the new adult group.
Data Sharing and Partnerships. Strong data collection and analysis will enable smarter efforts to tackle fraud, waste, and abuse. We are enhancing data sharing and collaboration to tackle program integrity efforts in both the Medicare and Medicaid programs. We are now collecting and optimizing enhanced Medicaid data from all states and two territories through the Transformed Medicaid Statistical Information System (T-MSIS). New efforts to use this data to detect fraud, waste, and abuse represent the first use of T-MSIS data for program integrity purposes, moving CMS closer to its goal of comprehensive, timely, national analytic data for Medicaid.
Education, Technical Assistance and Collaboration. The best way to manage improper payments is to help states avoid them at the outset. As part of CMS’ work to provide guidance and assistance for state implementation of the Medicaid Managed Care Final Rule from 2016, CMS released guidance in 2018 regarding Medicaid provider screening and enrollment for Medicaid managed care organization network providers. To further educate and collaborate with states, CMS engages in the following activities:
Reducing Improper Payments
The Payment Error Rate Measurement (PERM) program measures improper payments in Medicaid and CHIP and produces error rates for each program. In 2019, for the first time since 2014, we will be reporting the improper payment rate for people who are improperly enrolled in Medicaid and CHIP.
CMS continues to collaborate with states in implementing the new and enhanced program integrity initiatives from the Medicaid Program Integrity Strategy, as well as look for new areas of vulnerability and opportunity to support state efforts to meet high program standards. Our upcoming efforts will include:
As we give states the flexibility they need to make Medicaid work best in their communities, integrity and oversight must be at the forefront of our role. Beneficiaries depend on Medicaid and the Trump Administration is committed to the program’s long-term viability. We are using the tools we have to hold states accountable as we work with them to keep Medicaid sound and safeguarded for beneficiaries. These initiatives are the vital steps necessary to respond to Medicaid’s evolving landscape and fulfill our responsibility to beneficiaries and taxpayers.