Why Can’t Medicaid Stop Wasting Money?


No one wants to make unnecessary payments, whether it’s the inflated price of a car or an expensive cup of coffee. But what’s easy to avoid for most people has proven to be nearly impossible for the Medicaid program. A recent government report found that Medicaid isn’t in compliance with a federal rule requiring the elimination and recovery of improper payments.

The Improper Payment Information Act requires federal programs to meet annual improper payment reduction targets and get their improper payment rate below 10 percent, both of which Medicaid failed to do in fiscal year 2017. An estimated 10.1 percent of all Medicaid payments were deemed improper in FY 2017.

The report is likely to have little impact on Medicaid’s improper payments, Ellyn Sternfield, an attorney with Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC in Washington, told me. “CMS will submit a plan to correct the deficiencies identified, and nothing else will happen,” Sternfield, a former director of the Oregon Department of Justice’s Medicaid Fraud Control Unit, told Bloomberg Law.

The Health and Human Services Office of Inspector General report said the Medicaid provider enrollment process was one of the main reasons for the improper payments. “It seems like the identified issues with provider enrollment are much more easily fixable than medical necessity or outright fraud, and provider enrollment has been a priority with CMS, but first they need to figure out what they should do to fix the problem,” Judith Waltz, a health-care attorney with Foley & Lardner LLP in San Francisco, told me.

The Centers for Medicare & Medicaid Services at one time was considering a single federal provider enrollment process for Medicaid, but gave up on the idea, Waltz said. Having a single enrollment process instead of individual state systems might help clear up some of the improper payments, Waltz said.

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