The CMS has seen a dramatic increase in improper Medicaid payments and says the Affordable Care Act may be the cause.
The Medicaid improper payment rate has jumped from 5.8% or $14.4 billion in fiscal 2013 to 9.78% or $29.12 billion in fiscal 2015, according to an HHS financial audit (PDF)released Nov.13.
An improper payment can occur when funds go to the wrong recipient, the right recipient receives the incorrect amount of funds, documentation is not available to support a payment or the recipient uses funds in an improper manner. The tally includes fraudulent claims but is not a measure of fraud.
In a blog post describing the jump, CMS chief medical officer Dr. Patrick Conway attributed the increase to difficulties that state agencies are having with new provider enrollment and screening requirements under the Affordable Care Act. Without these new requirements, the Medicaid improper payment rate would have decreased to 5.1%, Conway said.
Requests for comment from the National Association of Medicaid Directors were not immediately returned.
“We often see such increases when new requirements take effect, as states and providers often need time to modify their operations in order to comply with the updated standards,” Conway said. “We believe, however, that these requirements will ultimately strengthen the Medicaid and CHIP programs, and that the improper payment rates will again decrease with state and provider experience.”
Thus far, Medicaid Recovery Audit Contractors (RACs) are providing little aid to states in recouping improper payments. States were required to implement Medicaid RAC programs by Jan. 1, 2012, under the Affordable Care Act. Recoveries totaled $57.71 million in fiscal 2015, up slightly from $55.1 million in fiscal 2014, according to the audit.
The audit does not explain why the RAC recoupment is so low.
To help bring improper payments down, HHS plans to continue to provide education and outreach to states on federal requirements for Medicaid enrollment and screening.
