The federal government’s Centers for Medicare and Medicaid Services (CMS) has issued an estimated $1.1 trillion in improper payments over the last decade, according to a new outside analysis. While CMS’s internal audits suggest at least $543 billion in improper payments over a decade, the Paragon Health Institute—an independent and nonpartisan healthcare think tank—says its research reveals the fraudulent payments are over double what the government reports.
According to researchers with the Paragon Health Institute, CMS data excludes eligibility checks, which produces a lower, inaccurate cost for fraudulent payments. The researchers note that CMS’s Payment Error Rate Measurement (PERM) audits under both the Obama and Biden governments excluded analysis of state eligibility determinations resulting in an inaccurate estimation of improper payments.
However, according to the Paragon Health Institute researchers, state eligibility determinations represent a critical point where fraud occurs. Under Obamacare, numerous states expanded their Medicaid programs resulting in a wider pool of eligible individuals and higher government reimbursements. The researchers contend this created “an incentive for states to improperly classify traditional enrollees, as well as ineligible applicants, as expansion enrollees.”
In addition to eligibility checks, the Paragon Health Institute notes that Medicaid’s presumptive eligibility rules—which allow hospitals to enroll patients in the government healthcare program based on stated income level and household size pending eventual review—represent another major avenue of fraud. According to the research, around 70 percent of individuals deemed eligible for Medicaid by hospital administrators are later determined to be ineligible.
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