CMS plans to approve more of the seven pending work-requirement waivers.


Sept. 28—Coming Medicaid activity will include more audits of Medicaid health plans and more requirements that enrollees get jobs or engage in other activities, according to the program’s federal leader.

Medicaid managed care plans were warned this week, at a policy meeting in Washington, D.C., about coming scrutiny by the Centers for Medicare & Medicaid Services (CMS).

 “I’m putting you on notice now—CMS will begin targeted audits to ensure that provider claims for actual healthcare spending matches what the health plans are reporting financially,” Seema Verma, administrator of CMS, told attendees at the 2018 Medicaid Managed Care Summit.

That federal scrutiny comes amid increases in both the number of Medicaid plans and the share of beneficiaries that are covered by them. Managed care plans covered 65 million Medicaid enrollees, or 81 percent of beneficiaries, by 2016, according to tracking by the Kaiser Family Foundation. However, among differing estimates, one consultancy estimated 2018 managed care enrollments at 54 million nationally.

Verma’s warning followed CMS’s announcement in June that it would launch eight program-integrity initiatives, including targeted audits of certain state managed care organizations (MCOs). As part of that effort, CMS expected to review financial reports from plans in several states to ensure they matched the actual claims data.

Francis Rienzo, interim CEO of Medicaid Health Plans of America (MHPA), was not certain whether Verma’s latest announcement went beyond the earlier announced audits.

Although Verma specifically cited the federal cost of Medicaid, Rienzo said greater scrutiny appears aimed expressly at minimizing misspending.

“CMS really believes the federal government needs more visibility into what’s going on because so much is under the control of the states,” Rienzo said in an interview.

States have their own audit programs, but those are nothing compared to the attention that managed care plans give to auditing the providers they pay, Rienzo said.

Largely due to the eligibility expansion under the Affordable Care Act (ACA), Medicaid spending increased from $456 billion in 2013 to an estimated $576 billion in 2016. Verma called “alarming” a recent projection by the CMS Office of the Actuary that Medicaid spending will reach $1 trillion by 2026.

Medicaid plans already have “tremendous incentives to get the encounter data right,” Rienzo said, because that data often determines whether payments are properly processed. Plans use their own audits and algorithms to look for clinicians who are not providing the care for which they are being paid. He noted the federal auditing push will come on top of insurers’ own efforts.

MHPA would prefer other approaches to ensure actuarial soundness, with audits focusing on the fee-for-service portion of Medicaid. That share accounts for about a quarter of Medicaid enrollees but more than half of the program’s spending, Rienzo said.

Other Integrity Initiatives

Other coming CMS integrity efforts, Verma said, will include:

  • Performing a “close review” of eligibility determinations by states
  • Strengthening federal oversight of state financial claims and rate-setting processes 
  • Building a “stronger regulatory framework” for transparency and accountability in Medicaid supplemental payments

CMS plans a particular focus on ensuring states “put up their fair share of state matching funds only from permissible sources.”

Verma told senators in August testimony that CMS has begun to review state Medicaid programs that the Office of Inspector General (OIG) of the Department of Health and Human Services previously found to be high-risk, and will examine how those states determine which groups are eligible for Medicaid benefits. OIG investigations of eligibility determinations by California, New York, and Kentucky found the states did not comply with federal and state eligibility determination requirements. Those missteps resulted in more than $1.2 billion in federal payments—in just one year—for nearly 600,000 enrollees who were ineligible or potentially ineligible, according to OIG calculations.

More Work Requirements

Verma said CMS also is moving to expand the use of work requirements.

CMS has approved state waivers that require work or other activities (described as “community engagement”) for Indiana, New Hampshire, Arkansas, and Kentucky, although the Kentucky waiver was at least temporarily blocked by a federal court. CMS is reviewing waiver proposals from seven other states.

“We are committed to this issue, and we are moving closer to approving even more state waivers,” Verma said. 

Verma provided her most detailed defense yet of the work requirements, which she described as “giving people the tools necessary for self-sufficiency.”

“I have heard the criticisms and felt the resistance, but I reject the premise,” Verma said. “It is not compassionate to trap people in government programs or create greater dependency on public assistance as we expand programs like Medicaid.”

She noted that states have exempted individuals who have disabilities, are medically frail, serve as primary caregivers, or have an acute medical condition that prevents them from successfully meeting the requirement. Verma rejected calls to bar states from disenrolling those who do not to comply with such requirements, noting that several previous administrations have approved waivers that disenroll beneficiaries for other reasons, such as failing to pay monthly premiums.

“Community engagement requirements are not some subversive attempt to just kick people off of Medicaid,” Verma said. “Instead, their aim is to put beneficiaries in control with the right incentives to live healthier independent lives.”

MHPA has no position on the work requirements but focuses on the ways they are used and implemented. Rienzo said the challenge for Medicaid plan enrollees is not actually meeting the requirements but proving they do so.

“Most of the people qualify, it’s just that they don’t have computers, Internet access, there are mental health issues, they live in rural areas, or they live in underserved areas,” Rienzo said. “They are not going to go out of their way to create a user name and a password on a website through a library computer 20 miles from home.”

Medicaid plans are sending letters, calling, and using officials certified by states to attest on behalf of enrollees who are trying to complete paperwork related to the requirements.

“It’s really an administrative-burden problem is what our folks are seeing,” Rienzo said.

Medicaid plans in Arkansas—the state furthest along in implementing a work requirement—have seen some people disenrolled for not meeting the requirements, and Rienzo expected those numbers to grow as the program rolls out over the coming months.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare 

Publication Date: Monday, October 01, 2018