Medicare Compliance & Reimbursement

Hospitals, IGT schemes are lightening states' load - but forcing government to pay more

Ongoing investigations into intergovernmental transfers and other financing mechanisms may be heating up.

Chairman of the House Energy and Commerce Committee Rep. Joe Barton (R-TX) sent letters to 20 hospitals across the country requesting information and Medicaid documents Jan. 11. He wants the facilities to come clean about arrangements that may be fraudulently churning out extra federal Medicaid matching funds for states - at the expense of patient care.

Barton says hospitals and clinics often receive generous but temporary payments that they quickly return to the state treasury so states can report the sum to the federal government. The result: States with equivalent populations and per capita levels of income receiving wildly disparate amounts of Medicaid funding.

Although Congress and the Centers for Medicare and Medicaid Services have reined in the practice, "states have consistently developed new variations to this basic approach," Barton says.

What's next: Hospitals on the committee's list will have to turn over net patient revenue, gross Medicaid revenue, overall cost-to-charge ratio and total Medicaid funds received since 2000.

These facilities will also have to hand over precise details about whether they ever engaged in or considered - or were ever approached to consider - any state/provider financing mechanism. Barton says the government also wants to know the amount of Medicaid funds received, returned, transferred and retained by the facilities.