CQ HealthBeat Obtains HHS List of States Using Accounting Tactics To Boost Federal Medicaid Funding
CQ HealthBeat has obtained a document that HHS "is using in a federal crackdown on dubious Medicaid accounting tactics." The document "names 15 states as potentially using the techniques, 20 as having agreed to drop them and 12 more whose use of the controversial techniques is still unknown," according to CQ HealthBeat (CQ HealthBeat, 4/8).
HHS Secretary Mike Leavitt in February said that the federal government could save $60 billion in Medicaid spending by pursuing several strategies, including prohibiting what he called "accounting gimmicks" used by states to receive more federal matching funds. The Government Accountability Office in January reported that such accounting tactics "cost the federal government several billions of dollars each year." Leavitt said HHS will "need to have a very uncomfortable but, frankly, necessary conversation with our funding partners, the states," about how some "shift the cost that they claim to pay to the taxpayers of other states" (California Healthline, 2/2).
Critics contend that states improperly inflate their Medicaid funding in order to receive more federal matching funds, while states deny that the practice is illegal and contend that the money goes to provide health care. According to CQ HealthBeat, Leavitt provided "on a confidential basis" the list of states using the practices to the House Energy and Commerce and the Senate Finance committees, as well as to the offices of Senate Majority Leader Bill Frist (R-Tenn.) and House Speaker Dennis Hastert (R-Ill.).
According to CQ HealthBeat, the following states were listed as "potential" users of the accounting tactics: Alabama, Alaska, California, Georgia, Idaho, Illinois, Iowa, Massachusetts, Minnesota, Mississippi, North Carolina, North Dakota, Tennessee, Virginia and Washington.
States listed as having agreed to revise their accounting practices were Alabama, Arkansas, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New York, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Washington and Wisconsin, according to CQ HealthBeat. "Some states appear on both lists because they may have dropped [the practice] for one type of health care spending but not for another," CQ HealthBeat reports.
CMS spokesperson Gary Karr said, "That there are states that may have inappropriate funding practices is not a big secret." However, he added that federal officials have declined to publicly release the names of the states who might be employing the practices because "we're not trying to shame one state over another. We're trying to work constructively with states. We haven't compiled any hit list" (CQ HealthBeat, 4/8).