The Medicaid fraud problem is not going away
David M. Levitt/Bloomberg/Getty Images
This level of fraud is historic. But rather than making a good-faith effort to identify fraud and recover taxpayer funds, Minnesota may become the first state to pursue the unprecedented step of suing CMS instead of using the agency’s internal appeals process. While state officials claim they are at a loss over how to satisfy CMS requirements, doubling down on fraud is doubtlessly not the solution CMS is looking for.
Vance, now tasked with developing a nationwide anti-fraud strategy, should build on CMS’ approach in Minnesota, one that directly targets the root of the problem.
Minnesota, like many states, receives a Federal Medical Assistance Percentage of 90% for adults covered under the ACA expansion. In practice, that means for every dollar the state spends, the federal government contributes nine. States that spend more get more. There’s no incentive for states to police fraud: They can’t go over budget, and the feds still pick up the tab for illegitimate claims, ultimately passing the balance on to taxpayers.
In context, CMS’ Medicaid funding pause in Minnesota functions as a blunt but effective check: no oversight, no money. Should Minnesota decide to bolster program integrity and ensure that Medicaid assistance only goes to Americans who are truly in need, it can confidently spend its cash again with the assurance of federal backing.
In the meantime, every other state would be wise to take note and get its house in order before Vance drops the hammer.
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