Fraudsters are seizing on the Medicaid redeterminations process to trick one of the most vulnerable populations into paying to keep their health benefits.
States paused the process of removing ineligible people from their Medicaid rolls in exchange for increased federal funds during the COVID-19 pandemic, leading Medicaid enrollment to swell to a record 97 million beneficiaries, according to the Kaiser Family Foundation. Congress authorized states to begin removing people from Medicaid in April and gave states 14 months to complete the process.
States are staffing up, investing in technology and partnering with insurance companies to manage the process. Scammers are betting states’ best efforts won’t be enough and are calling and texting Medicaid enrollees in some areas to say that unless they pay as much as $500, they will lose their insurance, said Lindsey Browning, director of Medicaid programming at the National Association of Medicaid Directors, which represents state officials.
“It's really unfortunate because Medicaid has been trying to get out clear messaging about what action folks need to take (and) when and this is really complicating that,” Browning said.
Most state Medicaid agencies are referring individuals who have been scammed to their attorney general’s office, she said.
Medicaid members who are victims of phone scams should contact their local police department or report their experience to the Federal Trade Commission, a spokesperson for the Centers for Medicare and Medicaid Services said in an email. The FTC did not respond to an interview request.
The majority of adults enrolled in Medicaid policies are unaware the redetermination process is underway, according to a recent report from the Urban Institute. The Health and Human Services Department projects up to 7 million of the 15 million individuals who will lose coverage during redeterminations will be dropped for procedural reasons, such as not having current contact information on file even though they are financially eligible.
Along with preying on consumers’ lack of insurance literacy, fraudsters are leveraging states and the federal government’s lack of experience investigating phone scams that victimize Medicaid beneficiaries, said Joe Records, counsel at the law office Crowell & Moring, where he primarily represents managed care companies. The agencies focus on charging individuals or organizations that improperly bill Medicaid agencies.
“[State and federal regulatory offices] are just not designed to deal with something like consumer protection,” Records said. “They're designed, at their core, as a tool of program integrity to ensure that the Medicaid program isn't being leeched off of.”
Some states' attorneys general have established healthcare-specific efforts within their consumer financial protection bureaus but phone scammers can be difficult to catch.
"These are whack-a-mole types of propositions, where it's kind of hard to pin down where the scam is originating from and hard to shut it down," Records said.
Enroll Wyoming, a nonprofit community organization focused on connecting people with health insurance, began hearing in late March that Medicaid beneficiaries were getting calls from fraudsters demanding money to maintain coverage, marketing director Caleb Smith said. An estimated 17,000 Wyoming residents will lose Medicaid benefits once the state completes its eligibility checks, according to a Modern Healthcare analysis.
“I think everybody should be doing more,” Smith said. “A scam that makes money is going to be duplicated, or it's going to be adapted. That's what’s going to happen here.”
Scammers have previously impersonated staffers at Enroll Wyoming to sell individuals short-term policies or fake insurance, Smith said. But he said he's never seen scammers demand cash to keep Medicaid benefits before. The nonprofit is trying to get the word out by notifying community organizations and providers and posting alerts on its website, social media accounts and member newsletter, Smith said.
“We're still early on, we’re not quite sure of what the impact is,” he said.
Arizona officials updated the state’s Medicaid website to include information about the scam in Wyoming, as well as to highlight how individuals can report fraudulent activity to the agency, said Kristen Challacombe, deputy director of business operations at the Arizona Health Care Cost Containment System. The state's Office of Inspector General does not have experience investigating schemes that threaten individual Medicaid members, she said.
“Our Office of the Inspector General is set up for researching referrals that come into the offices of members committing fraud and providers committing fraud,” Challacombe said. “I don't we’ve looked at the angle of members being defrauded because I don’t think it's been really prevalent until the recent activity.”
Arizona plans to text everyone on Medicaid to say officials will reach out about redeterminations via text and robocall, but will never ask for payment, Challacombe said. The state also expanded its $121.3 million contract with consulting firm Accenture to enable two-way texting through its Medicaid enrollment and eligibility technology system, so state representatives can respond to individual queries, Challacombe said.
Texting has so far been Arizona Medicaid’s most effective tool for reaching enrollees. Officials last year sent robocalls, physical letters and texts to Medicaid members to remind them to update their contact information, and text messages had the highest response rate, Challacombe said. More than 504,000 Arizona residents are set to lose coverage during redeterminations, according to Modern Healthcare's analysis.
“This is where we're going to be looking to build trust and understanding with members,” Challacombe said.