After finding one state shifting millions in Medicare-Medicaid dual eligible costs to the feds, Medicare's watchdog suspects more may be doing the same.
In the 2011 fiscal year, Iowa was making state supplementary payments to full benefit dual eligibles in a bid to "maximize" federal financial participation payments -- spending about $500,000 to get $39 million from the feds -- the Health and Human Services Office of the Inspector General found.
Iowa was paying $1 per month in supplemental income to 41,000 full benefit dual eligible beneficiaries and apparently using the $39 million in federal matching dollars to fund state contributions to beneficiaries' Medicare Part B premiums, under a "buy-in" policy set up by the Centers for Medicare & Medicaid Services.
While perfectly legal, Iowa's $1 per month beneficiary payments "are not intended as income assistance; instead, they were created for the express purpose of obtaining FFP for Medicare Part B premiums," the OIG argued.
The $1 payments "allowed the state to claim $39 million in FFP in FY 2011 that it would not otherwise have received. In essence, Iowa found a way to legally shift costs from the state to the federal government without a significant state contribution," OIG staff wrote. "Other states may be making similarly small state supplementary payments to accomplish similar cost-shifting."
OIG staff noticed the $1 supplemental state payments during an audit of Iowa's Medicare cost-sharing claims, and then wanted to find out the extent to which other states might be shifting costs to the federal government.
That turned out to be difficult, however, and, even as new dual eligible reform demonstrations get started, the question remains unanswered.
"States are not required to identify in the data they submit to CMS whether and why every dual eligible's Part B premiums are eligible for FFP," OIG staff wrote. "Therefore, an evaluation determining the extent to which other states might similarly be shifting costs to the federal government is not feasible."
To try to answer the question eventually, the OIG recommended that CMS seek changes to the Social Security Act to prevent states from using the supplementary payments to shift Medicare Part B premium costs for full-benefit dual eligibles to the federal government and to require states to submit more detailed eligibility information.
CMS neither agreed nor disagreed with the ideas, but did suggest that the issue probably falls under the purview of the Social Security Administration and that the SSA could revise its regulations to address the issue.