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By Jon Coupal
California has just asked for and received a waiver from the federal government that allows the state to skip eligibility verification for Medi-Cal.
According to estimates from the National Health Care Anti-Fraud Association, American taxpayers are losing more than $100 billion a year to Medicare and Medicaid fraud. In California – where the Medicaid program is referred to as Medi-Cal – there is little incentive to address waste, fraud and abuse in the handling of billions in federal funding.
With Medi-Cal, it now appears that California’s sloppiness is by design as there are perverse incentives to actually expand abuses. First, some background.
The Social Security Act mandates that Medicaid’s eligibility guidelines include verification of assets, income, and employment status. But, amid the chaos of the COVID-19 pandemic, emergency measures were enacted, and Medicaid enrollment was facilitated without the usual verification of eligibility. While understandably designed to provide immediate relief during a crisis, by law it was to be only a temporary measure.
Medicaid’s suspension of eligibility determination protocols like asset verification was similar to the SBA’s fraud-riddled Paycheck Protection Program — pay first, verify later. And while millions of people kept their healthcare, it was at a cost of hundreds of billions of taxpayer dollars lost to fraud and waste.
Now that many Medicaid recipients have reentered the workforce, a major beneficiary of lenient Medicaid eligibility standards appear to be the insurance companies because they receive a per-member, per-month fee from the American taxpayers.
Private insurers encouraging lax Medicaid eligibility requirements is fast-becoming a budgetary emergency — not just for California’s Medi-Cal program, but nationally. The Louisiana Department of Health spent $112 million on Medicaid coverage for nearly 14,000 adults who don’t appear to live in Louisiana, according to a state legislative audit. Simply “verifying” someone’s address would have solved that problem. Insurance companies don’t view this as “their” problem.
Now that the pandemic has subsided, Medicaid is under a statutory obligation to enforce eligibility verification again. Without it, taxpayers will be handing thousands of dollars per person to insurance companies for people who have access to other health plans.
To read the entire column, please click here.
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