Improper Medicaid, CHIP Payments on the Rise
The rate at which Medicaid and the Children’s Health Insurance Program made improper payments rose considerably in federal fiscal year 2019.
According to the Centers for Medicare & Medicaid Services, the Medicaid improper payment rate in FY 2019 was 14.9 percent, amounting to $57.36 billion in improper payments. The improper payment rate that year for CHIP services was 15.83 percent, representing $2.74 billion in improper payments. Both are significant increases over FY 2018, when the Medicaid improper payment rate was 9.7 percent, representing $36.25 billion, and the CHIP rate was 8.57 percent, for $1.39 billion.
CMS maintains that the improper Medicaid payment rate will decline in future years because it has introduced more rigorous enforcement of Affordable Care Act requirements to determine and periodically redetermine eligibility for Medicaid participants. Because each state is reviewed for improper payments only every three years, the agency maintains, it will take time before the full impact of the more rigorous review of beneficiary eligibility will be seen in annual statistics
Learn more about improper Medicaid and CHIP payments in the CMS fact sheet “2019 Estimated Improper Payment Rates for Centers for Medicare & Medicaid Services (CMS) Programs.”
The report includes:
Specifically, they experienced:
The Medicaid DSH cut was included in the 2010 health care reform law in anticipation of a great reduction in the number of uninsured people leaving hospitals providing much less uncompensated care and therefore not in need of as much DSH money. The law’s reach has not proven to be as great as anticipated, however, and two developments since the law’s passage have put a damper on the expected rise in the number of insured Americans: a court decision that made it optional for states to expand their Medicaid program and the repeal of the requirement that everyone purchase health insurance.
In the message, SNAP notes the important role Medicaid DSH payments play in helping private safety-net hospitals care for the many uninsured patients who continue to turn to them for care.
Cuts in Medicaid disproportionate share hospital (Medicaid DSH) allotments to states were mandated by the Affordable Care Act based on the expectation that the law would greatly reduced the number of uninsured Americans. While this has been the case, the decline in the number of uninsured has not been as great as expected. For this reason, Congress has on several occasions delayed the required Medicaid DSH cut.
The new Department of Homeland Security regulation, while focused on applicants for entry into the U.S., could have the unintended effect of discouraging legal immigrants from enrolling in Medicaid, CHIP, and other government programs and even lead them to disenroll from such programs out of a mistaken concern that participating in such programs could jeopardize their status as legal immigrants. The Kaiser Family Foundation, in fact, estimates that two to three million people will leave Medicaid and CHIP because of the new regulation.
The new requirements apply both to Medicaid fee for service and managed care programs and all of these steps must be completed by the end of calendar year 2019.