CMS to Increase Oversight of Medicaid Enrollment and Managed Care Plans

According to Modern Healthcare, CMS announced Last Tuesday that will be heightening audits to "confirm that Medicaid beneficiaries are correctly identified as expansion or pre-expansion enrollees". States receive higher federal match rates of around 90% for expansion enrollees, while the match rate can be as low as 50% for pre-expansion enrollees.


This imbalance in the federal matching rate creates financial risks for taxpayers by incentivizing states to shift cost to the federal government.
— Seema Verma, CMS Administrator

CMS will also audit states that are at high risk for enrolling ineligible people in Medicaid. In the past, states like California, Kentucky, and New York have been cited by the OIG for doing so.

This strategy is a multi-faceted plan to reduce improper payments within the Medicaid program. That includes fraudulent claims, payments distributed to the wrong recipient or for the wrong amount, payments with insufficient documentation and cases when recipient uses the funds improperly. Matt Salo, Executive Director of the National Association of Medicaid Directors stated he doesn't have a reason to believe there is any more fraud, waste, and abuse than there was 20 years ago but it is important to be 'constantly vigilant'.

CMS also intends to take a closer look at Medicaid managed care plans to ensure they are complying with medical loss ratio standards. The agency set a rule in 2016 that sets the medical loss ratio at 85%, meaning all insurers must spend at least 85% of their Medicaid revenue on medical care and other activities that will improve quality. The remaining 15% can be spent on salaries, marketing, profits, or other administrative tasks. If plans do not meet the 85% standard, they will have their state rates lowered in the future. 

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