Dive Brief:
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CMS Administrator Seema Verma on Tuesday discussed Medicaid fraud, overpayments and other related issues in front of the Senate Homeland Security and Governmental Affairs Committee. She additionally answered questions about two controversial health policy issues — preexisting conditions and short-term health plans.
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Verma said the federal government has transformed Medicaid from a program that helps the most vulnerable citizen to an "open-ended entitlement," especially after the Affordable Care Act's Medicaid expansion.
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A Government Accountability Office report also released Tuesday sketched out CMS actions to address Medicaid program integrity risk, including information on how CMS has tackled improper payments, supplemental payments and demonstration products.
Dive Insight:
The Trump administration has made big moves to change Medicaid, including encouraging states to impose work requirements, with mixed success, and attempts to dismantle the Affordable Care Act and the subsequent expansion of the program.
In testimony on Capitol Hill Tuesday, Verma called Medicaid "more than a safety net. It’s a lifeline."
At the same time she said the federal government has transformed Medicaid from a program that helps the most vulnerable citizen to an "open-ended entitlement," especially after the ACA's Medicaid expansion.
As an example, Verma said Medicaid made up less than 10% of state budgets in 1985. That percentage grew to 29% in 2016.
She said CMS wants to "reset the balance" of the federal-state program. That reset includes providing states with more flexibility to create programs that work for them, stronger accountability and enhanced program integrity.
Answering a question from Sen. Claire McCaskill, D-Mo., Verma said CMS will protect preexisting conditions despite the Department of Justice arguing that the ACA provision that does so is unconstitutional. She added that CMS will work with Congress to make sure people receive the "appropriate protections" if the lawsuit in Texas wipes out the ACA's preexisting condition provisions.
Verma also defended the administration's push for short-term health plans, which she said will give people who can't afford health insurance another choice.
She added that short-term health plans are an option to the ACA exchanges, which often have limited choice and networks and high deductibles.
Responding to concerns during the hearing, Verma noted CMS has strengthened consumer protection on short-term plans, such as informing people of the plans' limitations. Short-term plans are one piece of the Trump administration's plan to offer more lower-cost health insurance options, but critics point out that the plans don't offer ACA protections or cover all of what the law deems as essential health benefits.
Also at the hearing, GAO issued a report on Medicaid fraud, noting the program's size and flexibility for states open it up for potential fraud. It estimated $36.7 billion in improper payments in fiscal year 2017.
A review of GAO reports from the past five years found 86 recommendations to address "shortcomings in oversight." CMS has implemented 30 of those recommendations and agreed with many of the other 56, according to the report.
In June, Verma said CMS is cracking down on state Medicaid fraud. Those efforts include audits of state claims for federal matching funds, medical loss ratios and beneficiary eligibility determinations. On Tuesday, GAO said the agency needs to audit managed care payments, such as identifying overpayments to providers.
CMS plans to issue a proposed rule in spring 2019 to create new reporting requirements for supplemental payments, which totaled $48 billion in fiscal year 2016. GAO said CMS needs to create a rule that establishes clear approval criteria and review processes to make sure providers are receiving accurate payments.
Concerning demonstration projects, GAO said CMS must make sure the demonstrations reach budget neutrality. Demonstration projects have the chance to find significant savings and create better-informed policy decisions, but CMS has to make sure there are adequate pay-fors, GAO said
The report also reiterated the need for CMS to improve data for better program oversight, implement a fraud-risk strategy and improve federal-state teamwork to reduce improper payments.