States Received Enhanced Medicaid Funding During Covid Despite Wrongly Terminating Coverage

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[MM Curator Summary]: 4 states got a tsk-tsk. Will CMS point OIG at the other 46?



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New York, Florida, Texas and Minnesota terminated Medicaid coverage for some enrollees for “unallowable or potentially unallowable reasons” during the Covid-19 public health emergency, according to a recent Office of Inspector General report.


Four states did not meet all of the requirements to receive enhanced federal Medicaid funding during the Covid-19 public health emergency, a new Office of Inspector General (OIG) report found.

During the Covid-19 public health emergency, there was a continuous enrollment provision in place that barred states from disenrolling Medicaid beneficiaries unless they voluntarily disenrolled or left the state. In exchange, they received enhanced federal funding —a 6.2 percentage point increase from their regular federal medical assistance percentage (FMAP) rates. This provision ended in March, and now states are resuming their typical Medicaid renewal process.



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The OIG selected four states to review: New York, Florida, Texas and Minnesota. In total, these states received an additional $12.8 billion in FMAP funding between January 1, 2020, and June 30, 2021 (the OIG’s audit period). In each state, the OIG:

  1. Reviewed the public health emergency eligibility policies and procedures
  2. Compared a list of Medicaid enrollees on March 18, 2020, and June 30, 2021
  3. Examined enrollee terminations
  4. Examined cost-sharing for Covid-19 tests, services or treatment
  5. Analyzed premiums to ensure that the states met requirements

In its audit, the OIG discovered that all four states ended Medicaid coverage for some enrollees for “unallowable or potentially unallowable reasons.” Texas and Minnesota terminated Medicaid coverage for 26,915 enrollees for unallowable reasons. New York, Florida and Minnesota ended coverage for 220,113 enrollees for potentially unallowable reasons (meaning the states didn’t have adequate support or documentation to show that the terminations were allowable or not).

The OIG also found that Minnesota might have wrongly charged some Medicaid enrollees cost-sharing for Covid-19 testing, services and treatment. The state may have charged up to $951,202 for these areas. However, Minnesota officials stated that there is not sufficient data to understand for sure if this occurred, according to the audit.



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Based on these findings, the OIG made two recommendations for CMS. The first is to work with these states to understand what amount of funding they received from the enhanced Covid-19 funding that needs to be refunded. The second is to work with Minnesota in particular to understand if any Medicaid enrollees experienced cost-sharing for Covid-19 testing, services or treatments. If there was cost-sharing, then CMS should work with the state to make sure that the beneficiaries are reimbursed.

The OIG said that CMS concurred with both of these recommendations and detailed its next steps.

“Specifically, CMS stated that it will work with the States to determine what amount, if any, of the funding the States received because of the increased Covid-19 FMAP should be refunded to the Federal Government,” the OIG said. “CMS also stated that it would work with Minnesota to determine whether the State improperly imposed any cost-sharing for Covid-19 testing, services, or treatments and, if so, determine the appropriate remedy. CMS also provided technical comments on our draft report.”

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