California Wasted Billions in Improper Medicaid Payments

Medicaid overseers have ‘a responsibility to make sure that taxpayer dollars are spent only on those who are truly eligible…’

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(Lionel Parrott, Liberty Headlines) The state of California may have erroneously spent $3.3 billion on improper Medicaid payments—and Sen. Ron Johnson, R-Wisc., wants to know why, according to a press release from his office.

In a letter to Centers for Medicare and Medicaid Services Administrator Seema Verma, Johnson highlighted the issues with the potentially wasted federal Medicaid funds and demanded answers from the agency.

“This audit, in conjunction with a separate federal review, shows that potential improper payments in California may have cost federal taxpayers more than $3.3 billion,” Johnson wrote. “I respectfully request your assistance in understanding how the Centers for Medicare and Medicaid Services (CMS) plans to address the findings of these audits.”

It should come as no surprise that California was identified as a problem spot for Medicaid fraud. Not only is it the most populous state in the nation, but since the state expanded Medicaid in January 2014, nearly one-third of Californians use the federal program. This number includes half of the state’s youth.

In the letter, Johnson noted that Medicaid expansion has cost taxpayers almost $45 billion, which is 277 percent higher than California state officials predicted. In addition, California receives a disproportionate share of Medicaid expansion dollars, even when controlling for its massive size.

Recent independent audits found that the state spent more than a billion dollars in Medicaid funds on 445,000 beneficiaries who were “ineligible or potentially ineligible.” Alarmingly, CMS has not even attempted to recoup these funds. Both the Department of Health and Human Services’ Office of Inspector General as well as the California State Auditor investigated the matter and reached largely the same conclusions.

Shockingly, the California auditors discovered that over the last four years, the state made more than $383,000 in Medicaid long-term payments to individuals who were deceased.

All told, the California auditors found that “the monetary impact of the problems … could be greater than $4 billion.”

Now, Johnson wants to know if CMS plans to get the more than $3 billion back from California in improperly spent Medicaid funds—and if CMS is not planning to do so, he wants to know why. And not surprisingly, he also wants to learn what steps they’re taking to better oversee California’s Medicaid program and what they plan to do to cut down on Medicaid fraud in that state.

Johnson serves as chairman of the Senate Committee on Homeland Security and Government Affairs. In the letter to Verma, he brought up her own words before that same committee back in August, where she vowed to make sure CMS only spent funds on deserving individuals.

“As you stated in your testimony to the committee in August 2018, CMS has ‘a responsibility to make sure that taxpayer dollars are spent only on those who are truly eligible’,” Johnson continued. “I appreciate that we both share a commitment to ensure that Medicaid dollars are preserved for people truly in need.”