Senate Slams Medicaid For Failing To Stop Fraud

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Thomas Phippen Thomas Phippen is acting editor in chief at the Daily Caller News Foundation.
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  • A new Senate report says the Medicaid program is riddled with fraud and the government isn’t doing enough to stop it
  • The rate of fraud skyrocketed after Obamacare, with nearly half a million potentially ineligible persons getting benefits in California alone
  • Some unions have taken to skimming dues of Medicaid payments

The agency managing Medicaid, the government’s largest insurance program, is slacking off when it comes to ensuring taxpayer dollars are not wasted on fraud, according to a damning Wednesday Senate report.

Between the expansion of government healthcare in the Affordable Care Act that created Obamacare, providers overbilling for services patients don’t need, and unions skimming dues off Medicaid payments, the government “is failing to safeguard the hundreds of billions of dollars that fund Medicaid each year,” according to a 24-page report from Republicans on the Committee on Homeland Security and Governmental Affairs obtained by The Daily Caller News Foundation.

Across the Department of Health and Human Services, which administers Medicaid, programs “are riddled with fraud.” The department’s “fraud totals nearly $6 billion, by far the highest of any federal agency and 68 percent of the total fraud reported across the government.” (RELATED: ‘Largest’ Ever Medicare Fraud Scheme Busted At $1 Billion)

While the Centers for Medicare and Medicaid Services (CMS) “has vast authority granted … to police Medicaid fraud, but it has largely failed to do so,” the report says, noting that the department “has not taken basic steps to fight Medicaid fraud.” CMS has not implemented any of the 11 recommendations the Government Accountability Office has made since 2015.

The most common kind of fraud — overpayments to providers of Medicaid services — exploded from $14.4 billion before the Obamacare expansion in 2013 to $37 billion in 2017, a 157 percent increase, according to auditor estimates. HHS doesn’t keep precise data on total fraudulent spending in the Medicaid program. (RELATED: Senators Demand Answers To Medicaid Waste, Threaten Subpoenas)

Committee chairman Sen. Ron Johnson of Wisconsin and his Democratic counterpart Sen. Claire McCaskill of Missouri threatened to subpoena CMS administrator Seema Verma to get her to testify. The two senators accused Verma of dodging questions and refusing to provide answers and documentation in a May 15 letter.

Verma did reply to the senators’ request for information regarding CMS’ response to union skimming — where “states allow unions to classify home health care workers as government employees for purposes of collecting union dues from Medicaid payments.” Unions may be skimming $200 million year that could go to paying for healthcare, the report said.

Verma responded June 13 to tell Johnson that CMS “does not possess” information on how much money is diverted for union dues.

Johnson also sought answers on the estimated $1.2 billion paid to 445,000 ineligible or potentially ineligible beneficiaries in California, and the department’s lack of plans to recover the improper payments. “California exemplifies how the ACA’s Medicaid expansion reimbursement formula has allowed some states to game the system,” the report said.

Under the ACA, states can get Medicaid to pay 100 percent of costs for newly eligible Medicaid recipients, giving states a “tremendous financial incentive to categorize more people as newly eligible to obtain more federal money.”

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