CMS Issues Renewed Guidance in Effort to Ensure Medicaid Program Integrity, Signifies Agency’s Commitment to Safeguard Health and Welfare of Medicaid Enrollees

WASHINGTON, June 20 -- The U.S. Department of Health and Human Services' Centers for Medicare and Medicaid Services issued the following news release:

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- Renewed guidance reinforces CMS's efforts to enhance the financial and programmatic integrity of the Medicaid program.

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Today, the Centers for Medicare & Medicaid Services (CMS) 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.

This guidance follows a series of steps that CMS has taken since 2017, including its Medicaid Program Integrity strategy released last year, in an effort to reduce Medicaid improper payments across states to protect taxpayer dollars while enhancing the financial and programmatic integrity of the Medicaid program. Further steps include 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. CMS is also auditing Medicaid managed care plans' financial reporting and Medical Loss Ratios (MLRs) to ensure plans are not being overpaid; this includes reviews of high-risk vulnerabilities identified by the Government Accountability Office and the U.S. Department of Health and Human Services (HHS) Services' Office of Inspector General (OIG).

"We have seen a rapid increase in Medicaid spending in recent years and with this growth comes an increasing and urgent responsibility to ensure sound stewardship and oversight of our program resources, said CMS Administrator Seema Verma. "We are taking a strategic approach to managing improper payments, risks, and fraud as well as developing effective program integrity controls to ensure that government services aid their intended purposes."

Since 2014, the Medicaid program has added more than 15 million new working-age, adult enrollees who primarily qualify as part of the Patient Protection and Affordable Care Act's Medicaid expansion, for whom the federal government finances 90 percent or more of the cost. The guidance issued today addresses concerns raised by recent audits conducted by OIG the OIG and others that found that some states did not always determine Medicaid eligibility for expansion adults in accordance with federal and state requirements.

The guidance specifically emphasizes CMS's expectations for states that may be considering or who have implemented the Medicaid expansion. This comes in recognition of the increased risk resulting from the enhanced federal share of costs. States in the process of expanding coverage to the new adult group should provide these assurances of compliance with applicable program requirements when submitting the appropriate state plan amendments to CMS.

CMS is also developing an assurance template, based on the program readiness checklist included in this guidance, for states that have already adopted the adult group where states can attest to having proper systems and procedures in place to ensure appropriate claiming of the enhanced federal match of funds. As part of CMS's ongoing program integrity efforts for the Medicaid program, states may be subject to future program oversight reviews or audits to ensure compliance with these requirements.

Included in the guidance is a program readiness checklist to help states make accurate eligibility determinations and ensure appropriate financial claiming on an ongoing basis. The checklist can assist states in preparing for potential audits and/or program reviews. The following are highlights of the components of this program readiness checklist:

* Development of necessary program integrity expectations for contractors;

* Implementation of appropriate system and financial oversight controls;

* State plans that continually assess the ongoing accuracy of eligibility determinations and claiming of federal funding; and

* State eligibility systems that are capable of, and ready to submit required performance indicator data to CMS, including information regarding the timeliness and accuracy of eligibility determinations.

For more information, please refer to https://www.medicaid.gov/federal-policy-guidance/downloads/cib062019.pdf.