Trump can stop states from abusing Medicaid loophole without a law change
Medicaid fraud can’t stay out of the news cycle. A California man was just sentenced to 30 years in prison over a massive healthcare fraud scheme. Minnesota is still in the middle of a high-profile Medicaid case.
TL;DR
- Medicaid fraud is a recurring problem, with recent high-profile cases in California and Minnesota.
- The Trump administration has made combating healthcare fraud a priority.
- CMS deferred over $1 billion in federal Medicaid payments to California and Minnesota due to suspected fraud and noncompliance.
- Intergovernmental transfers (IGTs) are a financing mechanism where local governments pay states to draw down federal matching funds, potentially allowing states to increase federal spending without comparable state spending.
- The Government Accountability Office (GAO) previously flagged similar state schemes over twenty years ago.
- California is noted for using IGTs to finance higher payments to public ambulance providers compared to private ones, shifting the burden to federal taxpayers.
- New measures against Medicare and Medicaid fraud have been announced, with proposed restrictions on payment practices estimated to save over $775 billion.
- Policymakers are urged to require reporting that traces the source of nonfederal share dollars, the Medicaid payments generated, the federal match, and subsequent fund transfers.
- CMS has the authority to require this transparency and reject state plan amendments that lack it, without needing a law change.