CMS Defines New Medicaid Integrity Guidelines

The Centers for Medicare & Medicaid Services (CMS) released renewed guidance on Medicaid eligibility determinations and spending integrity the organization announced.

According to CMS, Medicaid eligibility for adults in expansion states are not being assessed within federal and state requirements in some states. The failure to correctly identify eligible and ineligible individuals could result in additional Medicaid costs.

“We have seen a rapid increase in Medicaid spending in recent years and with this growth comes an increasing and urgent responsibility to ensure sound stewardship and oversight of our program resources,” CMS Administrator Seema Verma stated.

The organization’s new guidance emerges after Office of Inspector General (OIG) audits revealed eligibility determinations processes inconsistent with federal and state standards.

CMS has compiled an assurance template in addition to the guidance to provide a checklist for states to consider, which covers accuracy of eligibility and of federal financial participation (FFP) claims, program monitoring, additional integrity tools, and financing.

When states expand Medicaid coverage, they must submit three state plan amendments (SPAs) –  Adult Group (Eligibility), federal medical assistance percentage (FMAP), and Alternative Benefits. Under the new integrity guidelines, CMS developed a checklist for states to assure that the expanded Medicaid plan

• Operates efficiently and properly under section 1902(a)(4) of the Social Security Act (SSA)
• Complies with Section 1903 of the SSA regarding payment to states
• Is aligned with program integrity provisions in 42 CFR Part 455
• Accommodates an agency/agencies that are capable of determining eligibility in compliance with 42 CFR Part 435 (also see §1902(a)(4) and (5) of the SSA) and specifically, if applicable, 42 CFR 435.119 (also see §1902(a)(10)(A)(i)(VIII.)
• Has an eligibility/enrollment and claims system that supports accurate and timely processing and adjudications/eligibility determinations and that effectively communicates with providers, beneficiaries, and the public in accordance with 42 CFR 433.112(b)(14)

CMS also will confront the nearly $1 billion of impermissible state financial claims that have accumulated.

The statement warns states to anticipate federal audits of their eligibility determination and managed care financing processes and systems.

“We are taking a strategic approach to managing improper payments, risks, and fraud as well as developing effective program integrity controls to ensure that government services aid their intended purposes,” Verma stated.

In the CMS Medicaid Program Integrity Strategy established in 2017, CMS introduces its plan by reminding the states of the high stakes. Medicaid spending rose to $576 billion in 2016, in part due to Medicaid expansion. The federal government contributed $363 billion to that number, $100 billion more than the previous year.

The CMS Medicaid Program Integrity Strategy of 2017 called for focusing state audits on certain states’ managed care organization (MCO) financial reporting, state audits of eligibility determinations, and other measures intended to enforce the responsibility each state has to properly steward their funding.

Looking forward, an analysis by the Kaiser Family Foundation (KFF) expects enrollment for FY 2019 to be flat, like it was in FY 2018, noting three potential factors: the statuses of the economy, redetermination delays, and ACA enrollment.

The study anticipates 2019 healthcare spending to rise by 5.3 percent, compared to 2018.

KFF concludes that “FY 2019 will be a year to watch how Medicaid’s role evolves on the ground in the 50 states and DC.”

Doubtless, CMS will be watching this evolution carefully as the organization performs new integrity audits on states’ eligibility determinations.