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Senate Chairman Presses HHS to Do a Better Job of Curbing Medicaid Fraud

Seema Verma highlights CMS’s two-year-old focus on preventing improper payments.

A year after his committee released a major report blasting weak controls against improper Medicaid payments, Sen. Ron Johnson, R-Wis., has grown impatient with remedies pursued by the Health and Human Services Department.

In a June 26 letter to Seema Verma, administrator of the Centers for Medicare and Medicaid Services, the chairman of the Homeland Security and Governmental Affairs Committee recapped his staff report’s conclusion that anti-fraud specialists at the joint federal-state Medicaid program are failing to effectively combat improper payments, which have risen by 157 percent since 2013. And he asked for progress on state-by-state audits of payments sent erroneously to undeserving recipients.

“With Medicaid spending now projected to rise at an average annual rate of 5.7% over the next decade,  significantly faster than U.S. gross domestic product, it is imperative that CMS utilize every tool at its disposal to minimize waste, fraud and abuse,” Johnson wrote.

CMS announced new initiatives just days after the committee’s scathing report, he continued. The report documented a large spike in Medicaid overpayments to providers and an increasing number of Medicaid fraud criminal convictions. It also showed that CMS had “not taken basic steps to fight Medicaid fraud, including reviewing federal eligibility determinations for accuracy and even creating an antifraud strategy,” Johnson said.  

The new CMS steps a year ago included stronger audit functions, enhanced oversight of state contracts with private insurance companies, increased beneficiary eligibility oversight, and stricter enforcement of state compliance with federal rules, Johnson noted. Audits of state programs were to track amounts “spent on clinical services and quality improvement versus administration and profit,” new audits of state beneficiary eligibility determinations, and use of advanced analytics to both improve Medicaid eligibility and payment data for program integrity purposes, he reminded Verma.

Johnson then asked for details, by July 10, such as data on which states have been audited, the status and methodology of the audits, any available results and forms derived from them. He also asked for details on CMS’s new use of “advanced analytics” of data that can flag payments that appear improper.

A CMS spokesperson told Government Executive on Thursday that the agency has “received the chairman’s letter and will respond directly to the committee.”

Verma’s office in the past week has updated its efforts in Program Integrity in a blog and press release. “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 the Children’s Health Insurance Program, Verma wrote in a June 25 blogpost discussing the agency’s Payment Error Rate Measurement.

In a June 20 press release, her agency added that it had issued guidance to state Medicaid agencies that “outlines the necessary assurances that states should make to ensure that program resources are reserved for those who meet eligibility requirements.”

On top of the reform efforts launched in 2017, CMS said, the agency is addressing “a nearly $1 billion backlog of impermissible state financial claims, initiating new federal audits of state eligibility determinations and managed care financial reporting, and achieving significant milestones for enhanced state data reporting that support program integrity efforts.