GAO: Medicaid Overpaying for Beneficiaries With Private Coverage

The U.S. could save several million dollars annually if it ensured that Medicaid operated as the "payer of last resort," according to a Government Accountability Office report released Tuesday, The Hill reports (Ferris, The Hill, 2/10).

Congress generally established Medicaid as a payer of last resort, which means that if Medicaid beneficiaries have an alternate source of health care coverage, that source should pay "to the extent of its liability" before Medicaid contributes to the cost (GAO report, 1/28).

For the report, GAO used data from 2013, when roughly a quarter of states had expanded Medicaid under the Affordable Care Act. According to The Hill, the number of Medicaid beneficiaries with private coverage likely has increased.

Report Findings

The report found that roughly one in seven, or 7.5 million individuals, were enrolled in Medicaid and a private plan. According to the report, the proportion of Medicaid enrollees with private coverage is particularly high among older U.S. residents. About 35% of Medicaid beneficiaries over 65 also had private coverage, compared with about 12.4% of nondisabled adults ages 18 to 34.

GAO said that while the government should garner substantial savings from such individuals, problems with insufficient data and coordination resulted in the government sometimes paying medical bills that should have gone to private insurers.

The report found that most states had difficulty ensuring private insurers paid claims to the extent of their liability for covered eligible Medicaid enrollees. For example:

96% of states said insurers denied a claim "for procedural reasons"; and
90% said insurers were unwilling to share coverage information or sharing information that was "incomplete or confusing" (The Hill, 2/10).

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