Medicare Compliance & Reimbursement

Federal government is being taken advantage of by states, panel says.

How to make states accountable for spending federal Medicaid funds only on needed Medicaid services: That's the continuing quest of the House Energy and Commerce Committee, whose Health Subcommittee held its first hearing of the year on the matter March 18.
 
Witnesses said that the Centers for Medicare & Medicaid Services has taken some productive actions to limit states' use of so-called intergovernmental transfers to gain more federal funding without putting up the additional state dollars legally required to match it. For example, the General Accounting Office praises CMS's appointment of a special team to coordinate agency review of states' annual Medicaid plans and its new internal guidelines for reviewing some of the revenue mechanisms through which states draw down federal funds.

Nevertheless, said analysts from GAO and the HHS Office of Inspector General, still more federal consistency and financial oversight are needed. At least some money that continues to leak through IGT loopholes may not even be reaching Medicaid beneficiaries, the analysts said.

Among remaining problems, according to GAO: Transition periods for states to shift their Medicaid revenue sources away from the so-called upper payment limit schemes through which many gained illicit federal matching funds are longer than they reasonably need to be. In addition, "while the agency was attempting to narrow the glaring UPL loophole in 2001, it was allowing additional states to engage in the very schemes it was trying to shut down, at a substantial cost to the federal government," GAO analysts said.

"It was particularly disturbing to learn that one state had required a nursing home to use an intergovernmental transfer to transfer back to the state approximately $82 million dollars," said committee Chair Rep. Joe Barton (R-TX) in a statement. "At the same time, the state had identified a pattern of deficiencies and substandard care at this nursing home that constituted actual harm for the patients there. We need to ask why a state is removing millions of dollars from such an institution at a time when it clearly was in crisis and could have used those dollars."

The panel probably won't broach Medicaid legislation in this short congressional year but will continue gathering information in hopes of putting together a package next year, Rep. Heather Wilson (R-NM) -- chair of Commerce's Medicaid task force -- told an America's Health Insurance Plans policy conference March 10.