Washington, D.C.–In anticipation of the
next Medicaid Payment Error Rate Measurement (PERM) audit, Senate Finance
Committee Republicans, led by Ranking Member Mike Crapo (R-Idaho), sent a
letter to the Centers for Medicare & Medicaid Services (CMS) highlighting
concerns with the rising rate of improper payments in Medicaid. The November 2020 report found improper
payments totaled over $86.5 billion–over 21 percent–mostly driven by
eligibility errors. The letter further
calls for enhanced program integrity measures and state-by-state analysis to
ensure beneficiaries receive the services they are entitled to without wasting
taxpayer dollars.
From
the letter:
“One of the most common
eligibility errors often occurs when failing to verify information provided by
the applicant, including income. Failure to properly verify that applicants are
eligible for the program, especially to this extent, harms the nation’s taxpayers
and takes resources away from those who are eligible and who truly need the
program.”
“There is concern that
the November 2020 improper payment rate estimate of 21.4 percent was
unrealistically low because the eligibility reviews excluded one-third of
states.”
“Congress needs
complete and updated information about the improper payment rate in Medicaid as
well as the corresponding drivers of this problem. We understand that the
essential work on the 2021 CMS improper payment report has concluded, and
drafts of the report have been completed. While state and Federal responses to
COVID-19 halted some payment and eligibility reviews in 2020, this work is too
vital to remain paused when the consequences are so dire.”
The letter, signed by all
fourteen Finance Committee Republican members, can be accessed here or below.
Dear Administrator
Brooks-LaSure:
As some in Congress
consider proposals to expand the Medicaid program by potentially half a
trillion dollars over the next decade, it is vital that both Senators and
Members of the House of Representatives have accurate information about how the
program is using taxpayer resources. Every November, the Centers for Medicare
and Medicaid Services (CMS) releases estimates of improper payment rates for
programs within its jurisdiction. The November 2020 report showed that the
Medicaid improper payment rate reached 21.4 percent, with total federal
improper payments in the program amounting to $86.5 billion annually. Medicaid’s improper payment rate has
significantly increased since the passage of the Affordable Care Act, which
dramatically expanded Medicaid. In 2013, the year before the ACA’s Medicaid
expansion took effect, the improper payment rate was just 5.8 percent.
According to last
year’s report, eligibility errors are the major drivers of the increased
Medicaid improper payment rate. According to CMS, “Eligibility errors are
mostly due to insufficient documentation to affirmatively verify eligibility
determinations or non-compliance with eligibility redetermination requirements.” One of the most common eligibility errors
often occurs when failing to verify information provided by the applicant,
including income. Failure to properly verify that applicants are eligible for
the program, especially to this extent, harms the nation’s taxpayers and takes
resources away from those who are eligible and who truly need the program.
There is concern that
the November 2020 improper payment rate estimate of 21.4 percent was
unrealistically low because the eligibility reviews excluded one-third of
states. Since the Obama Administration
cancelled eligibility audits from 2014-2017, this year’s forthcoming report
will be the first complete assessment of all states since the expansion took
effect. Given its more complete nature, the upcoming assessment has the
potential to show that the improper payment rate in the program exceeds 25
percent, totaling above $100 billion annually.
Such a high improper
payment rate demonstrates that the program requires a stalwart defense to
ensure those that are eligible receive the care they need. This rate also
raises questions of whether Congressional and regulatory actions have made
Medicaid too complicated for the Federal government to properly oversee it,
especially given the differing improper payment rates among states. Congress
needs complete and updated information about the improper payment rate in
Medicaid as well as the corresponding drivers of this problem. We understand
that the essential work on the 2021 CMS improper payment report has concluded,
and drafts of the report have been completed. While state and Federal responses
to COVID-19 halted some payment and eligibility reviews in 2020, this work is
too vital to remain paused when the consequences are so dire.
Given the importance of
accurate data to inform ongoing policy discussions, by Monday, November 8, we
ask that you provide:
- The updated improper payment rate in
Medicaid; - A breakdown of improper payment rates
by state; and - The
corresponding estimated total of improper payments from insufficient
verification or non-compliance with eligibility requirements.
When asked about this
at a June hearing in front of the Senate Finance Committee, Secretary Becerra
committed to making available such data. We also request a briefing with
Committee Members’ staff, so that Congress can ask informed questions on this
important matter. Thank you for your prompt attention to this shared concern.