Medicaid made $36 billion in improper payments in 2016, a $7 billion increase from $29 billion in improper payments in 2015, according to a Government Accountability Office report released Tuesday.
A Subcommittee on Oversight and Investigations met Tuesday to find ways to strengthen the $576 billion a year federal and state program, boost fraud enforcement, and consider Medicaid expansion.
However, not all of the improper payments represent fraud, said Timothy M. Westmoreland, a professor at Georgetown University Law Center.
"Many are appropriate, but simply badly documented," Westmoreland told the committee.
To effectively combat fraud, the Centers for Medicare and Medicaid Services needs accurate claims data, said Ann Maxwell, assistant inspector general for the Department of Health and Human Services.
Josh Archambault, a senior fellow for The Foundation for Government Accountability, said providers do not always reconcile patient records with credit balances, and report and return the Medicaid overpayment.
The OIG estimates that states could recover federal Medicaid overpayments of nearly $17 million, he said.
The ACA also requires states to terminate any providers already terminated for cause in another state. Despite this, the OIG found that 12 percent of providers terminated for cause in 2011 continued participating in other states' Medicaid programs as of January 2014, Archambault said. This amounted to $7.4 million paid to 94 providers.
Medicaid enrollment under Medicaid expansion of the Affordable Care Act, and costs are skyrocketing, witnesses told the committee.
[Also: What you need to know about Medicaid block grants]
"Medicaid has effectively crowded out funding for other state safety net programs that might have a greater likelihood of improving measured health outcomes," said Paul Howard, senior fellow, director of Health Policy at The Manhattan Institute.
However, committee member Rep. Raul Ruiz of California said if Medicaid expansion is repealed, people will lose their healthcare coverage and uncompensated costs will increase.
Providers have agreed. A recent survey found hospital executives want to keep Medicaid expansion and other insurance coverage in place under the Affordable Care Act - except that of the individual mandate.
The Vizient survey found that 68 percent of hospital executives said for them, keeping Medicaid expansion coverage is second only in importance to retaining insurance for consumers with pre-existing conditions.
Republican Speaker of the House Paul Ryan of Wisconsin has voiced support for sending Medicaid block grants to states as a way to cap federal spending.
[Also: 17 million more enrolled in Medicaid and CHIP, CMS says]
If this happens, states will be left holding the bag for folks without health insurance, Westmoreland said.
Medicaid enrollment has skyrocketed beyond projections, by an average of 110 percent, Archambault said.
Medicaid expansion transformed the program from a safety net into an income-based entitlement, he said. Unlike traditional Medicaid, Medicaid expansion serves able-bodied, working-age adults, according to Archambault.
As states balance their budgets, Medicaid is often the first place to look as it is the biggest line-item in almost every state, he said.
Unfortunately, Medicaid expansion has not stopped folks from showing up in emergency rooms, Archambault said.
"Folks are not getting coordinated care because they're showing up in the ERs," he said.
A recent study found that 55 percent of Medicaid visits to the ER were unavoidable, he said.
The 32 states that have expanded Medicaid saw the largest growth in enrollment, of 35.7 percent. From September 2013, when open enrollment under the ACA began, to September 2016, enrollment in Medicaid or CHIP increased by close to 28 percent, according to the GAO report.
Although most of the growth was a result of newly eligible adults enrolling in states that expanded the program, Medicaid has grown, regardless of expansion, in all but two states, the report said.
Twitter: @SusanJMorse