The Centers for Medicare and Medicaid Services has said it will be increasing federal oversight to stop states from putting Medicaid dollars toward healthcare for people who are in the country illegally.
Under U.S. law, federal Medicaid funding is generally only available for emergency medical services for noncitizens with unsatisfactory immigration status who would otherwise be Medicaid-eligible. But according to CMS, some states have pushed the boundaries, "putting taxpayers on the hook for benefits that are not allowed," the agency said.
"Medicaid is not, and cannot be, a backdoor pathway to subsidize open borders," said CMS Administrator Dr. Mehmet Oz. "States have a duty to uphold the law and protect taxpayer funds. We are putting them on notice – CMS will not allow federal dollars to be diverted to cover those who are not lawfully eligible."
WHAT'S THE IMPACT
As part of the action, CMS is ramping up financial oversight to identify and stop what it deems to be improper spending.
This includes focused evaluations of select state Medicaid spending reports, in-depth reviews of select states' financial management systems, and assessing existing eligibility rules and policies to close loopholes and strengthen enforcement.
CMS is also urging all states to immediately examine and update internal controls, eligibility systems and cost allocation policies to ensure full compliance with federal law. Any improper spending on noncitizens will be subject to recoupment of the federal share, the agency said.
The effort is part of Trump's executive order, Ending Taxpayer Subsidization of Open Borders. CMS said it would continue to act "decisively" to ensure Medicaid funds go toward eligible individuals.
"Medicaid funds must serve American citizens in need and those legally entitled to benefits," said CMS Deputy Administrator and Director of the Center for Medicaid and CHIP Services Drew Snyder.
THE LARGER TREND
Earlier this month CMS issued a proposed rule to close a Medicaid tax loophole it said is exploited by some states to benefit illegal immigrants.
States inflate the federal payments and use the money to free up funds for non-Medicaid purposes, according to CMS.
"Some states have exploited these tax loopholes to take money from federal taxpayers and then simultaneously spent 'state' money on new benefits for illegal immigrants," CMS said.
The CMS proposed rule would prohibit states from taxing Medicaid business at higher rates than non-Medicaid business, bar the use of vague language to disguise Medicaid-specific taxes, maintain statistical testing while adding safeguards to prevent system gaming, and provide a transition timeline based on the age of existing waivers.
Public comments on the proposed rule will be taken until July 14.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.