Spending Advances Medicaid with Transparency, Accountability
By - The US Government Accountability Office (GAO) has released a report reviewing approved expenditure authorities within section 1115 of the Social Security Act. This segment of the Social Security Act allows the Secretary of the Department of Health and Human Services (HHS), Sylvia M. Burwell, to waive with “broad authority” specific Medicaid requirements and permit costs that are generally ineligible for federal matching funds to further Medicaid’s primary intentions. Those approved expenditure authorities via section 1115 allow states to receive federal funds for otherwise unmatched Medicaid expenses.
GAO examines expenditure authorities approved for Medicaid coverage and other purposes. The report additionally analyses the criteria and documentation from the HHS used to determine whether or not the aforementioned expenditure authorities advance Medicaid’s goals within a total of 25 states.
GAO additionally confirms the methodology of review on behalf of HHS requires restructuring regarding how Medicaid beneficiaries receive various healthcare services. “We have had long-standing concerns with HHS’s policy, process, and criteria for reviewing and approving Medicaid section 1115 demonstrations,” says GAO. “These concerns have centered on HHS’s implementation of its policy requiring that section 1115 demonstrations be budget-neutral to the federal government, that is, that the federal government’s expenditures under a state’s Medicaid program with a demonstration should be no higher than they would have been without the demonstration,” GAO explains.
Analyzing innovate Medicaid approaches is vital for financial advancement and progress within the healthcare industry. “Expenditure authorities approved in section 1115 demonstrations can allow states to extend Medicaid coverage to populations or services that would not otherwise be eligible under traditional Medicaid programs,” confirms GAO.
Highlights of GAO recommendations
Section 1115 is directly associated with substantial growth of expenditures within the Medicaid program, asserts GAO. “Ensuring the long-term sustainability of the program is important for the tens of millions of low-income beneficiaries who depend on Medicaid to cover their medical costs,” GAO maintains.
Without the proposed action from Burwell, it is possible federal funds will be erroneously duplicated, says GAO. Burwell’s decision to waive certain Medicaid requirements and approve expenditures authorizes her responsibility to ensure a judiciously executed use of Medicaid resources, confirms GAO. There is an additionally noted concern that federal costs for Medicaid may substantially increase beyond what they would have been sans demonstration, GAO adds. Greater transparency and enhanced accountability are needed, such as how the demonstration correlates to healthcare coverage within an economically disadvantaged beneficiary population, says GAO.
“Given the breadth of the Secretary’s authority under section 1115 — the exercise of which may result in billions of dollars of federal expenditures for costs not otherwise allowed under Medicaid — explicit criteria are needed to illuminate how HHS determines that new demonstration spending promotes Medicaid objectives,” explains GAO. “Given the amount of money involved and the broad array of purposes for which expenditure authorities have been approved, it is important that HHS document the basis for its decisions that approved expenditure authorities are likely to promote Medicaid’s objectives,” GAO adds.
GAO recommends HHS “issue criteria for assessing whether expenditure authorities are likely to promote Medicaid objectives and document the use of these criteria in HHS's approvals of demonstrations.” GAO recommends Burwell implement three specific actions:
- Release criteria to assess whether section 1115 expenditure authorities are predicted to promote the goals of Medicaid.
- Confirm documentation of criteria application within all section 1115 demonstration approvals for the purpose of disseminating information to Congress, states, the public, etc.
- Aid states in preventing duplicative spending by regularly providing assurances, such as claiming protocols or the application template.
Regarding HHS’ commentary to the above recommendations, HHS “partially concurs,” expressing ongoing commitment to transparency to promote high quality care and coverage for Medicaid beneficiaries. Additionally, HHS confirms it will “more clearly articulate how section 1115 authority is being used to assist states in addressing evolving trends or needs in their Medicaid programs.”
However, GAO notes HHS remains “silent” about whether or not it will issue written guidance on the vaguely presented general criteria within its response. Says GAO, “HHS officials said that it is not in the agency’s best interest to issue guidelines that might limit the agency’s flexibility in determining which demonstrations promoted Medicaid objectives.”
Legislative implications are evolving
Following the implementation of the Affordable Care Act (ACA), Medicaid expansion has certainly been a prominent issue. Sixty-five million beneficiaries are covered by Medicaid at an estimated 2014 cost of $500 billion. According to GAO, the aforementioned waivers apply to approximately $150 billion in spending which totals one-third of Medicaid dollars. Avoiding duplication of federal funding will only improve an already complicated and widespread segment of the healthcare industry.
Florida Governor Rick Scott (R) has addressed the aforesaid issues recently via an ongoing Medicaid dispute. Scott contends waiver funds that reimburse those hospitals caring for the uninsured are dissipating. Scott maintains states are thereby being forced to expand Medicaid. The issue of Florida being coerced into accepting Medicaid expansion will be reviewed by the House later this year.
