Johnson, Jordan Seek Information on Louisiana Medicaid Audit Showing Serious Eligibility Errors

Recent study found 93 percent of examined Medicaid expansion enrollees were ineligible for services they received

WASHINGTON — U.S. Sen. Ron Johnson (R-Wis.), chairman of the Senate Homeland Security and Governmental Affairs Committee, and Representative Jim Jordan (R-Ohio), ranking member of the House Committee on Oversight and Reform, sent a letter to the Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma Thursday requesting information on a recent audit that showed 93 percent of examined Medicaid expansion enrollees in Louisiana were ineligible for services. Among the audit’s findings was that numerous beneficiaries with incomes exceeding $100,000 still received Medicaid benefits, including one with an income of $145,000. Louisiana has also relied on Medicaid expansion recipients to “self-report” changes to their wages – which auditors say may violate federal law.

In the letter, Senator Johnson and Representative Jordan ask whether CMS has inquired about the audit, what steps are being taken to recoup the overpayments, and how they are working to ensure federal Medicaid dollars in Louisiana and across the country are spent responsibly going forward.

“State auditors discovered that up to 93 percent of the expansion population they examined received Medicaid services while ineligible, including numerous beneficiaries with incomes exceeding $100,000 — far above the income permitted to qualify for Medicaid. Auditors estimated that Louisiana may have improperly paid up to $85 million,” the congressmen wrote.

“If these improper (over) payments are occurring in one state, it is logical to assume overpayments are occurring in other states. We respectfully request information about what the Centers for Medicare and Medicaid Services (CMS) plans to do to determine where overpayments are being made, steps CMS will take to recover overpayments, and controls CMS will put in place to ensure federal Medicaid dollars are only paid to those who qualify.”

Senator Johnson’s and Representative Jordan’s letter to Administrator Verma can be found here and below:

January 31, 2019

The Honorable Seema Verma
Administrator
Centers for Medicare & Medicaid Services
200 Independence Avenue, S.W.
Washington, DC  20201

Dear Administrator Verma:

The Senate Committee on Homeland Security and Governmental Affairs (HSGAC) and the House Committee on Oversight and Reform are examining Medicaid fraud and the Affordable Care Act’s (ACA) Medicaid expansion. We write regarding a recent Louisiana state audit. State auditors discovered that up to 93 percent of the expansion population they examined received Medicaid services while ineligible, including numerous beneficiaries with incomes exceeding $100,000—far above the income permitted to qualify for Medicaid. Auditors estimated that Louisiana may have improperly paid up to $85 million. If these improper (over) payments are occurring in one state, it is logical to assume overpayments are occurring in other states. We respectfully request information about what the Centers for Medicare & Medicaid Services (CMS) plans to do to determine where overpayments are being made, steps CMS will take to recover overpayments, and controls CMS will put in place to ensure federal Medicaid dollars are only paid to those who qualify.

We commend Louisiana state auditors for their efforts and informative report. In a November 2018 Louisiana audit, the Legislative Auditor compared wage data from the Louisiana Workforce Commission—used to verify eligibility for the Medicaid expansion population—to state health department Medicaid data for beneficiaries from single-person households. Auditors initially identified nearly 20,000 Medicaid recipients who appeared to make too much money to qualify for Medicaid. They then pulled a targeted selection of 100 single-person household expansion recipients, confirming that 93 of them, or 93 percent, were ineligible at some point during their Medicaid coverage between 2016 and 2018. Of these 100 beneficiaries, 14 had annual incomes of more than $100,000, with one making $145,146—766 percent higher than the $16,753 maximum yearly income for a single individual allowed under the ACA Medicaid expansion.

A second, random sample of 100 single-person Medicaid expansion recipients produced similar results: Louisiana auditors found that 82 percent did not qualify for Medicaid at some point between 2016 and 2018.

All told, the Louisiana auditors projected the state may have paid up to $85 million for ineligible Medicaid recipients from single-person households between 2016 and 2018. Auditors reported that the high ineligibility rate resulted in part from many beneficiaries “lowballing their income at some point,” or failing to report income changes to the state. Louisiana “relies on Medicaid recipients to self-report changes in their wages,” a policy that auditors said may violate federal law requiring states to ensure that beneficiaries report “any changes that may affect their eligibility . . . in a timely and accurate manner.” Louisiana Legislative Auditor Daryl G. Purpera said he believes the audit’s findings show that eligibility problems under the Medicaid expansion are potentially reaching “a point where all 50 (state auditors) are going to have to declare they can no longer say the state’s books are accurate.”

The Louisiana audit raises further questions about whether the ACA Medicaid expansion’s spiraling growth results in part from eligibility errors or fraud. As HSGAC’s prior oversight has found, CMS and other data show original Medicaid expansion per-enrollee spending and enrollment projections were significantly understated. As a result, the expansion has cost taxpayers an estimated 157 percent more than state officials had predicted.

In his April 2018 testimony before the House Oversight and Reform Committee, Acting Director for the Center for Medicaid and CHIP Services Tim Hill testified about CMS improving its “ongoing efforts to ensure that States are appropriately determining eligibility for beneficiaries in the expansion population.” Similarly, you stated in your testimony to HSGAC in August 2018 that CMS has “a responsibility to make sure that taxpayer dollars are spent only on those who are truly eligible.” However, we have continuing concerns about CMS’s oversight of the Medicaid program and its expansion population. To assist in our oversight of significant eligibility errors and potential fraud in the Medicaid program, we respectfully request that you provide the following information:

  1. Please explain if CMS has contacted Louisiana state officials about the recent audit showing eligibility errors for the Medicaid expansion population.
  2. Please explain what steps CMS is taking, or plans to take, to better police potential Medicaid eligibility fraud in every state to help ensure federal Medicaid dollars are only paid to eligible beneficiaries.
  3. Please explain if CMS intends to attempt to recoup any federal Medicaid dollars identified as being spent fraudulently.
  4. Please explain if the new audits of state Medicaid programs, conducted under CMS’s program integrity initiatives announced in June, will include Louisiana.
  5. Regarding Louisiana’s reliance on Medicaid recipients to self-report changes in their wages, please:
    1. Explain whether other states are permitted to do so;
    2. List any other states that allow such self-reporting; and
    3. Explain what actions CMS has taken or plans to take to better oversee or regulate such self-reporting.

Please provide this material as soon as possible but no later than 5:00 p.m. on February 14, 2019, so that we may begin to receive responsive information.

The Committee on Homeland Security and Governmental Affairs is authorized by Rule XXV of the Standing Rules of the Senate to investigate “the efficiency, economy, and effectiveness of all agencies and departments of the Government.” 

The House Committee on Oversight and Reform is the principal oversight committee of the House of Representatives and may at “any time” investigate “any matter” as set forth in House Rule X.

If you have any questions regarding this letter, please ask your staff to contact Jerry Markon of HSGAC staff at (202) 224-4751 or Betsy Ferguson of the House Oversight and Reform Committee staff at (202) 225-5074.  Thank you for your attention to this matter.

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