"Medicaid spending represents one-sixth of the national healthcare economy, and Medicaid serves more people, including some of the Nation's most vulnerable individuals, than any other Federal healthcare program. In 2010,
"Historically, only certain groups of individuals who had incomes and assets below certain thresholds were eligible for Medicaid. These traditional coverage groups include low-income parents and other caretaker relatives with dependent children, pregnant women, people with disabilities, children, and the elderly. Although many "newly eligible beneficiaries" applied for Medicaid coverage for the first time after the passage of the ACA, many people who applied for coverage qualified for these traditional coverage groups. We refer to these individuals as "non-newly eligible beneficiaries."
"OIG shares the Committee's commitment to protecting Medicaid from fraud, waste, and abuse and has an extensive body of oversight work in this area. A strong program integrity strategy starts with prevention. Correctly determining beneficiary eligibility prevents Medicaid from making improper payments for people who are not eligible for the program.
"For the past several years, OIG has conducted several audits of States' Medicaid eligibility determinations under the Medicaid eligibility rules changed by the ACA. To date, OIG has issued seven audit reports of four States: four on newly eligible beneficiaries and three on non-newly eligible beneficiaries.
"We found that these States made payments on behalf of beneficiaries who were not eligible, or who may not have been eligible, for Medicaid. We also identified instances where States received higher Federal reimbursement rates than appropriate on behalf of beneficiaries who were eligible for a traditional eligibility group; but were incorrectly enrolled as newly eligible. These four States did not comply with requirements to verify applicants' income, citizenship, identity, and other eligibility criteria. We estimated that almost
"My testimony today details this work, which was done in
States do not always correctly determine Medicaid eligibility for both newly eligible and non-newly eligible beneficiaries
"Correctly determining beneficiary eligibility is vital to the accuracy of Medicaid payments. To ensure that Medicaid makes payments on behalf of the right beneficiary, it is critical to determine whether the beneficiary receiving services is actually eligible for Medicaid, as well as for the specific eligibility category the beneficiary has been placed in. The seven recent OIG audits of four States estimated that almost
"For each of our seven audits, we reviewed the Medicaid eligibility determinations made by the State Medicaid agency for a random sample of beneficiaries, classified as newly eligible or non-newly eligible depending on the audit, to determine whether the State agency made payments on behalf of beneficiaries who did not meet Federal and State eligibility requirements.
"For each sampled beneficiary, we obtained, where possible, application data and documentation used to support the State agency's eligibility determination. Reviewing that data and documentation, we determined whether the State agency followed Federal and State requirements and its own procedures to verify eligibility information when making the eligibility determinations. In instances where the eligibility documentation, data, or the State's determination was unclear, we followed-up with State agency officials.
"If we were able to determine that a beneficiary was not eligible for Medicaid based on the application data and documentation, we refer to the beneficiary as ineligible. As an example, a sampled beneficiary attested to having income, supported by documentation, which was above the Medicaid income limit. In this example, the State agency incorrectly determined the beneficiary to be eligible and incorrectly claimed Federal reimbursement for payments made on behalf the ineligible beneficiary. We also refer to a beneficiary as ineligible if the beneficiary was eligible for a traditional coverage group but the State incorrectly determined that the beneficiary was newly eligible. As an example, a sampled beneficiary attested to having income that was below 100 percent of the Federal poverty level. The beneficiary qualified for Medicaid under a traditional coverage group but was not newly eligible. As result, the State agency incorrectly received a higher Federal reimbursement rate for this beneficiary. In this type of case, we used the difference between the higher Federal reimbursement rate for the newly eligible population and the lesser reimbursement rate for the traditional population when determining the amount of Federal reimbursement that was incorrectly claimed.
"If we were unable to conclusively determine eligibility because the State agency did not have sufficient supporting documentation or did not verify eligibility in accordance with Federal and State requirements, we refer to the beneficiary as potentially ineligible. As an example, a sampled beneficiary had not had a Medicaid eligibility redetermination since 2011. There were no case notes or other documentation between
"Based on our sample results in each audit, we estimated the total number of ineligible beneficiaries and beneficiaries who were potentially ineligible during our audit period; we also estimated the total amount of Federal Medicaid reimbursement made on behalf of ineligible beneficiaries and potentially ineligible beneficiaries during our audit period.
Results from four audits on Medicaid eligibility for newly eligible beneficiaries
"OIG reviewed whether certain States correctly determined eligibility, following changes made by the ACA to Medicaid eligibility rules.
"OIG reviews of Medicaid eligibility determinations by
"Both human and system errors contributed to these payments. As an example, human error occurs when State agency officials making eligibility determinations do not correctly act on known information. We identified instances where State agency officials incorrectly determined beneficiaries to be newly eligible even though the beneficiaries' application data or supporting documentation clearly demonstrated that their household income amounts were above the allowed maximum threshold of 138 percent of the Federal poverty level.
"We found that some enrollment data systems were lacking the ability to (1) deny or terminate ineligible beneficiaries; (2) properly redetermine eligibility when a beneficiary aged out of an eligibility group; (3) maintain records, in accordance with Federal requirements, relating to eligibility determinations and verifications; and (4) retrieve and use information from other Government databases, such as those managed by the
Results from three audits on Medicaid eligibility for non-newly eligible beneficiaries
"OIG also reviewed whether certain States were correctly determining eligibility for non-newly eligible beneficiaries in accordance with Federal and State requirements. Errors associated with non-newly eligible beneficiaries were generally due to beneficiaries not meeting income requirements (including not submitting required tax information forms) or specific coverage group requirements. Additionally, there were a few errors due to beneficiaries not meeting citizenship and residency requirements. As a result of States incorrectly determining beneficiaries' eligibility, payments were made on behalf of those beneficiaries that were ineligible or potentially ineligible, resulting in improper and potentially improper costs to the Federal Government.
"OIG reviews of Medicaid eligibility determinations by
"As with OIG's newly eligible audits, the non-newly eligible audits showed that both human and system errors contributed to these payments; specifically, (1) State agency staff did not consider all relevant information when making determinations, (2) caseworkers made errors, (3) system delays occurred during a system conversion, and (4) State agencies did not always maintain documentation to support their eligibility determinations.
Comparison of newly eligible and non-newly eligible errors
"In the three States where we have completed audits of both newly eligible and non-newly eligible beneficiary eligibility determinations, we have found eligibility determination errors in both groups.
View chart at https://www.finance.senate.gov/download/10302019-ritchie
"Conclusion Correct determination of beneficiary eligibility is vital to the accuracy of Medicaid payments. Seven recent OIG audits of four States estimated that almost
"To address the concerns that we identified, we recommended that these States ensure that enrollment data systems be able to verify eligibility criteria, develop and implement written policies and procedures to address vulnerabilities, and undertake redeterminations as appropriate.
"OIG will continue to prioritize Medicaid oversight to prevent fraud, waste, and abuse and take appropriate action when they occur. We are committed to ensuring that Medicaid pays the right amount, to the right provider, for the right service, on behalf of the right beneficiary.
"Thank you for your ongoing leadership and for affording me the opportunity to testify on this important topic."