Improper Medicaid payments hit $30 billion last year, according to the CMS. Now, the agency is giving states tools to address the issue.
Medicaid's improper payment rate was 9.8% for 2015, nearly double what it was in 2013. The agency is anticipating the rate to hit 11.5% this year.
“States are facing greater challenges keeping pace with stricter enrollment requirements, tracking providers who have been excluded from other states' or federal health care programs, and generally adapting to changing regulations for qualifications of certain provider types,” CMS said in an alert.
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 also includes fraudulent claims.
To educate states about the issue, the agency is using a new tool known as E-Alerts, which informs relevant stakeholders of a concern and the factors that may be causing it. In Tuesday's alert, the agency also outlined possible solutions.
The increase in improper payments is likely due to several factors. The biggest one is that millions of people have joined Medicaid as a result of expansion under the Affordable Care Act. That creates more opportunities for inaccurate payments or for people to potentially defraud the program, said Troy Barsky, a partner at the law firm Crowell & Moring. Barsky was previously CMS' director of the division of technical payment policy.