Libertarian group sues government over information on $143 billion in improper Medicaid payments

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CMS has been sued for not providing information about what its doing to reduce improper payments in accordance with FOIA timelines.


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The libertarian organization Americans for Prosperity Foundation is suing the Centers for Medicare and Medicaid Services to find out what it is doing about $143 billion in improper payments made by Medicaid.

The complaint asks for records on CMS’s efforts to recover improper Medicaid payments and for data showing improper payment rates by states. According to CMS, improper Medicaid payments totaled $143 billion in 2019 and 2020, rising from 14.9% of all payments in 2019 to 21.4% in 2020. Medicaid is a joint federal-state healthcare program for the poor.

“Failing to recover $143 billion in improper Medicaid payments is an affront to hardworking American taxpayers and a threat to Medicaid’s long-term fiscal stability,” said Dean Clancy, a senior health fellow at Americans for Prosperity Foundation. “More transparency and accountability is needed to ensure that CMS manages Medicaid responsibly.”

The $143 billion in improper payments is about 11% of the roughly $1.3 trillion spent by Medicaid from 2019 to 2020. By contrast, Medicare, the federal healthcare program for seniors and the disabled, had about $55 billion in improper payments in 2019 and 2020. Additionally, Medicare’s improper payments declined from almost $29 billion in 2019 to just under $26 billion in 2020.

Federal law requires CMS to recover any improper payments over the amount of 3%.


Americans for Prosperity Foundation requested CMS supply the information on improper payments under a Freedom of Information Act request it filed on May 5, 2021. Under federal law, an agency has 20 days to respond to a FOIA request or 30 days under unusual circumstances. When CMS did not comply, Americans for Prosperity Foundation filed suit in federal court.

An improper payment occurs when a recipient receives an incorrect amount of funds or uses the funds in an improper way or when the recipient is ineligible to receive the funds in the first place. Medicaid enrollees cannot receive benefits when they earn more income than is allowed under the program or when they fail to meet residency requirements. The Americans for Prosperity Foundation complaint notes that state governments often do not ensure compliance with federal Medicaid requirements.

CMS did not immediately respond to a request for comment.


Democrats in Congress are trying to expand Medicaid. Georgia Sens. Raphael Warnock and Jon Ossoff and Wisconsin Sen. Tammy Baldwin are trying to establish a Medicaid-like coverage plan run by the federal government. It would cover people who live in the 12 states that have not yet expanded Medicaid under Obamacare. The federal government would fully fund the plan. States would not have to provide matching funds.


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