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From Health Law Daily, April 13, 2018

Lack of federal oversight major source of Medicaid improper payments

By Vanessa M. Cross, J.D., LL.M.

In fiscal year 2017, improper payments to the joint federal-state health care program, Medicaid, were estimated at $37 billion of federal expenditures, an increase from an estimated $29.1 billion in fiscal year 2016, according to Government Accountability Office (GAO) testimony before the House of Representative’s Subcommittee on Government Operations and the Subcommittee on Intergovernmental Affairs, Committee on Oversight and Government Reform on April 12, 2018.

Background. Since 2003, Medicaid has been on the GAO’s High Risk List, according to the GAO report. The House committee hearing was conducted to address the significant financial loss that has occurred due to improper payments made through state Medicaid programs, examine Medicaid program data-sharing policies between federal and state governments, and evaluate fraud identification and prevention practices. While CMS has worked to implement GAO recommendations to identify, prevent, and recover improper payments, testimony before the committee has identified that 34 GAO recommendations related to improper payments dating back to 2002 currently remain open.

Improper payments vs. fraud. In fiscal year 2017, the Medicaid program had a 10.1 percent improper payment rate, an equivalent of $36.7 billion, according to the testimony of Andy Schneider, Research Professor of the Practice at the Center for Children and Families at the McCourt School of Public Policy at Georgetown University. Professor Schneider testified that improper payments should be distinguished from payments provided to Medicaid providers based on fraud. In his testimony, he noted that fraud is a deception or misrepresentation made by a person or entity with the intent to receive unauthorized payments, while improper payments are payments that should not have been made or that were made in an incorrect amount based on unintentional errors.

Need for increased oversight. Professor Schneider recommended that a reduction in both improper payments and payments based on fraud can be reduced by screening providers before allowing them to treat Medicaid beneficiaries and bill the Medicaid program, whether in managed care or fee-for-service. He testified that more than half (54 percent) of the improper payments was due to noncompliance with provider screening and enrollment requirements and that the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) includes a significant number of program integrity provisions that apply to providers serving patients in the Medicaid program.

The GAO report also noted that oversight improvement for improper payments have been hampered by the lack of a systemized approach to data sharing between federal and state governments. In considering the issue of oversight, Daryl Purpera, Legislative Auditor for the State of Louisiana and Chairman of the Louisiana Task Force on Coordination of Medicaid Fraud Detection and Prevention Initiatives, testified that the State Auditors are being underutilization in the fight against fraud, waste, abuse, and improper payments in the Medicaid program. Additional testimony before the committee on the need for greater federal oversight over the Medicaid program was provided by CMS and the HHS Office of the Inspector General (OIG).

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