BILLIONS LOST AS A RESULT OF IMPROPER MEDICAID PAYMENTS

Medicaid is losing billions of dollars from improper payments. According to HHS Agency Financial Reports, improper Medicaid payments reached $30 billion in 2015 and grew to nearly $37 billion in 2017. The vast majority of these improper payments were determined to be improper claims payments due to data errors.

The federal government often points out such substantial figures as evidence of prevalent fraud, waste, and abuse that purportedly is present in federal government health care programs. Yet in point of fact, a 2013 HHS-OIG report presents some much needed perspective, pointing out that 57 percent of the "improper" Medicaid payments originate from more commonplace, routine issues, involving the "eligibility errors" that occur when a patient moves from one state to another and doesn't provide Medicaid with a change of address. Fraud in the Medicaid program may well still be a dramatic problem, but when "improper payments" are the outcome of such "eligibility errors" instead of fraud, the true scope of the challenge can better be recognized.

With the increased awareness that government officials have paid to the need for accurate Medicaid claims information within federal government healthcare systems, one may have expected that now, nearly five years since an inspector general testified that much of the data used to identify improper payments and fraud is not "current, available, complete, [or] accurate", the issues would certainly be tended to and the federal government's records rendered more reliable.

In a statement to the House Oversight and Government Reform Committee, Carolyn Yocom, GAO Health Care Director mentioned, "despite efforts to reduce improper payments in the Medicaid program by the Centers for Medicare & Medicaid Services, which oversees the program, overall improper payments continue to increase."

The climb in improper payments can be contributed to the large size of the program and unsatisfactory oversight. Director Yocom testified that Medicaid has been on the list of high-risk programs dating back to 2003 and that its oversight is insufficient. She stated, "the size and complexity of Medicaid make the program particularly vulnerable to improper payments-- including payments made for people not eligible for Medicaid or made for services not actually provided."

The GAO characterizes an improper payment as "any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements. Reducing improper payments-- such as payments to ineligible recipients or duplicate payments-- is critical to safeguarding federal funds, but the federal government has consistently been unable to determine the full extent of improper payments and whether its actions to reduce them are appropriate."

Improper payments also consist of:

• Any payment made in error when the payment was the liability of a third party
• Any payment to an ineligible recipient
• Any payment for an ineligible service
• Any duplicative payment
• Payment for services not received (except where authorized by law).
• Any payment that does not account for credit for applicable discounts.

In a two-year time span, improper Medicaid payments have risen by $8 billion dollars. This is an obvious sign the program does not have effective oversight. To preserve the vital federal-state health insurance program and safeguard taxpayer dollars, the complications that develop from poor eligibility data within the Medicaid program must be resolved.

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AN UPDATE ON THE VIRGINIA MEDICAID EXPANSION DISCUSSION

Legislators in Virginia were unable to approve the Commonwealth's biennial spending plan earlier this year; which included arrangements for Medicaid Expansion. Because of a divide in Republican support within the House and Senate, the lawmakers agreed to reconvene for a special session, which took place Wednesday. Leading up to the session, in an effort to encourage Republican Senate support for Medicaid expansion, House Speaker M. Kirkland Cox (R) proposed strictly enforcing work requirements. He recognizes the concerns of conservatives but also understands the need for healthcare for the 400,000 uninsured Virginians. Regarding the work requirements, Kirkland said, "We're going to look at that and try to, you know, strengthen that somewhat. I think among conservatives that's something that's very important."

Despite the split support in the last regular session, some lawmakers that had opposed expansion are now reevaluating supporting it. One of those who had previously been against expansion is Senate Majority Leader Thomas K. Norment Jr. (R). His desire to support expansion is contingent on a more conservative approach and it would need to be developed collaboratively. In an interview with WCVE radio, Norment stated, "if, in fact, there is going to be a fiscally responsible and conservative Medicaid expansion plan, it has got to be developed on a more collaborative basis. One person can't develop that plan, come in and drop it down in front of 21 Republican senators and say, 'Here it is.' That is not going to work."

In order to approve a budget and expand Medicaid, lawmakers will need to have their plan prepared by July 1 or the state will experience its very first government shutdown.

Senate Minority Leader Richard L. Saslaw (D) says, "This is something that should have been done three or four years ago, but better late than never. Between 350,000 and 400,000 Virginians will get the health care that's needed."

This week's two-hour special session concentrated primarily on procedural moves. The next step will be to address Governor Ralph Northam's (D) newly proposed budget bill that he revealed in between the sessions. It will make its way through the House and Senate finance committees and then onto the chambers for voting. Finally, a conference will be held to sort any standing details between the House and Senate. It will require two Republicans to successfully pass Medicaid expansion within the Senate; however, just one vote from Republicans is necessary to pass it in the form of a budget amendment.

According to Governor Northam's estimations, savings as a result of Medicaid expansion will be around $421 million. The House would like to see funds invested into education, raises for educators, and other areas so they predict the savings from expansion to be closer to $307 million as a result of varying start dates.

Traditionally, Virginia's Republican representatives have not supported Medicaid expansion, but in recent months it's starting to look like that will change. Even Though the Republican Senate did not hold elections last year, the chamber just about lost its majority to Democrats in November. As a result of the coming elections and the need for support from voters to maintain control of the House, Republicans are now making efforts to convert Republican opposition to back Medicaid expansion.

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MEDICAID EXPANSION IS VITAL TO VIRGINIA'S RURAL HOSPITALS

The future of rural hospitals in Virginia hangs in the balance in the upcoming debate over Medicaid expansion. As a result of the large population of uninsured and low-income residents in Virginia's countryside, rural hospitals rely heavily on the Medicaid program for financial assistance. If Virginia representatives are unable to expand Medicaid it will most certainly put Virginia's rural, low-income population in jeopardy.

According to the North Carolina Rural Health Research Program (NCRHRP), over 80 of the nations rural hospitals have shut down between January 2010 and July 2017. Beth O'Connor from the Virginia Rural Health Association points out, "Two-thirds of those are in states that have not expanded Medicaid. So while Medicaid expansion may not be the magic wand, it's certainly a big piece of the puzzle for those small rural facilities." Despite the fact that rural communities usually oppose Medicaid expansion, O'Connor believes that supporting it would serve to ensure the survival of these important medical providers.

Given the circumstances, Quentin Kidd, Dean of the College of Social Sciences at Christopher Newport University, believes that the opposition to expansion is about to shift. To him, the fact that Terry Kilgore, House Republican representing the southwest corner of VA, advocates expansion is a sign that the Republican Senate will probably do the same. Kidd states, "it wouldn't surprise me if a good number of them were rural senators because they all know that at the end of the day the dollars and cents are going to be meaningful to their rural hospitals and they need those rural hospitals to stay open."

Rural hospitals anxiously await April 11, when Virginia lawmakers will reconvene in a special session to attend to the state's budget plan and make a decision on Medicaid expansion. Currently, there have been no further changes of position from Senate Republicans on Medicaid expansion.

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