GAO to CMS: State Medicaid Payment Flaws Hurt Transparency
"[It] is important for CMS to have relevant, reliable, and timely information for management decision making and external reporting purposes."
By - The reliability regarding tens of billions of dollars in states’ supplemental payments is being called into question this month by the United States Government Accountability Office (GAO).
Because complete reliable data is deficient, transparency and oversight are in turn suffering, says GAO within testimony before the Subcommittee on Health, the Committee on Energy and Commerce, and the House of Representatives.
Although CMS has responded with claims its efforts are indeed “adequate,” GAO still maintains “its recommendation is valid.”
According to GAO, both Congress and the Centers for Medicare & Medicaid Services (CMS) are working to strengthen transparency efforts, especially regarding disproportionate share hospital (DSH) payments – a Medicaid supplemental payment made for uncompensated care costs in associated with low-income patient populations.
As RevCycleIntelligence.com reported, disproportionate share hospitals can expect payment reductions of over $35 billion between 2017 and 2024.
“[CMS] generally does not require or otherwise collect data from states on sources of funds to finance Medicaid, nor ensure that the data it does collect are accurate and complete,” GAO explains.
“Gaps in oversight remained for non-DSH supplemental payments, which as of 2011 exceeded DSH in amounts paid,” GAO adds.
“CMS lacks data on supplemental payments made to individual providers. Per federal internal control standards, agencies should have reliable information for decision making and reporting, and reasonable assurance that agency objectives, such as compliance with laws, are being met,” GAO maintains.
39 states made non-DSH supplemental payments – and standard Medicaid payments – to over 500 hospitals, says GAO. However, these supplemental payments exceeded total costs regarding Medicaid care delivery by nearly $2.7 billion, says GAO.
“[Payments] that greatly exceed costs raise questions about whether they are economical and efficient as required by law, and the extent to which they are ultimately used for Medicaid services,” GAO maintains.
GAO recommended several years ago that Congress make guidance on permissible methods for calculating non-DSH payments mandatory from CMS, as well as state reports and audits required. CMS officials stated three years ago such requirements required additional legislative action, GAO explains.
“[States] are increasingly relying on providers and local governments to finance Medicaid and data needed for oversight are lacking,” maintains GAO. “[States'] financing arrangements can effectively shift costs from states to the federal government.”
In 2012, over one-quarter of the nonfederal share – nearly $46 billion – was financed with provider and local government funds, says GAO. Such represents an increase of 21 percent compared to 2008.
“CMS is responsible for ensuring that state Medicaid payments are consistent with federal requirements, including that payments are consistent with economy and efficiency and are for Medicaid-covered services,” states Katherine M. Iritani, Health Care Director.
“To do so, it is important for CMS to have relevant, reliable, and timely information for management decision making and external reporting purposes,” she says.
