Johnson Releases Report on CMS’s Poor Oversight of Medicaid Fraud and Overpayments

WASHINGTON — U.S. Sen. Ron Johnson (R-Wis.), chairman of the Senate Homeland Security and Governmental Affairs Committee, released a majority staff report Wednesday titled, “The Centers For Medicare & Medicaid Services Has Been A Poor Steward Of Federal Medicaid Dollars,” detailing how the Medicaid program is plagued by waste, fraud and abuse.

“The U.S. health care financing system is broken and increasingly is dominated by the government. With federal Medicaid spending growing at an alarming rate, it is more important than ever that each Medicaid dollar is spent on someone in need – but we know that is far from the case,” said Johnson. “The Medicaid program doles out $37 billion a year of improper payments, a 157 percent increase since 2013. Medicaid accounted for 26 percent of all the improper payments made by the federal government in fiscal year 2017. CMS must take proactive steps and make a serious commitment to reduce Medicaid fraud and improve program integrity.”

Key findings of the report:

  • Congress substantially expanded CMS’s oversight responsibilities in the Deficit Reduction Act of 2005, requiring CMS to root out Medicaid fraud, waste and abuse. Yet CMS has failed to live up to the requirements of this law by conducting only irregular, highly flawed audits of Medicaid providers and failing to meet annual deadlines for program integrity reporting to Congress.
  • CMS has not taken basic steps to fight Medicaid fraud, including reviewing federal eligibility determinations for accuracy and even creating an antifraud strategy. Since 2015, GAO has made 11 separate anti-fraud recommendations to CMS. CMS has implemented none.
  • HHS programs overall are riddled with fraud.  New data show that HHS fraud totals nearly $6 billion, by far the highest of any federal agency and 68 percent of the total fraud reported across the government.
  • Although there is no specific breakdown for Medicaid in HHS fraud numbers, evidence indicates that Medicaid fraud is rampant.
    • The Committee identified nearly 1,100 people convicted or charged nationwide since 2010 in fraud or related schemes targeting Medicaid to obtain prescription opioids.
    • GAO and other watchdogs have documented potential improper or fraudulent Medicaid payments totaling more than $1 billion in at least eight states—California, New York, Kentucky, Illinois, Arizona, Florida, Michigan, and New Jersey.
  • The ACA worsened the problem of Medicaid fraud and overpayments by giving states incentives to declare people newly eligible to receive 100 percent federal reimbursement during the Medicaid expansion’s first three years.

The report can be found here

Details on Sen. Johnson’s Medicaid oversight work can be found below:

Sept. 27, 2017: Johnson’s letter to CMS and governors of eight states requesting data on the Medicaid expansion’s exploding costs can be found here.

Jan. 17, 2018: Johnson releases report, “Drugs for Dollars: How Medicaid Helps Fuel the Opioid Epidemic,” which can be found here, including Johnson’s letter to CMS Administrator Verma.

May 2, 2018: Johnson’s letter to CMS requesting information on union “dues skimming” from Medicaid payments can be found here.