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California Made Medicaid Payments on Behalf of Non-Newly Eligible Beneficiaries Who Did Not Meet Federal and State Requirements

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California Made Medicaid Payments on Behalf of Non-Newly Eligible Beneficiaries Who Did Not Meet Federal and State Requirements Department of Health and Human Services OFFICE OF INSPECTOR GENERAL CALIFORNIA MADE MEDICAID PAYMENTS ON BEHALF OF NON-NEWLY ELIGIBLE BENEFICIARIES WHO DID NOT MEET FEDERAL AND STATE REQUIREMENTS Inquiries about this report may be addressed to the Office of Public Affairs at [email protected]. Daniel R. Levinson Inspector General December 2018 A-09-17-02002 Office of Inspector General https://oig.hhs.gov The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as amended, is to protect the integrity of the Department of Health and Human Services (HHS) programs, as well as the health and welfare of beneficiaries served by those programs. This statutory mission is carried out through a nationwide network of audits, investigations, and inspections conducted by the following operating components: Office of Audit Services The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting audits with its own audit resources or by overseeing audit work done by others. Audits examine the performance of HHS programs and/or its grantees and contractors in carrying out their respective responsibilities and are intended to provide independent assessments of HHS programs and operations. These assessments help reduce waste, abuse, and mismanagement and promote economy and efficiency throughout HHS. Office of Evaluation and Inspections The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide HHS, Congress, and the public with timely, useful, and reliable information on significant issues. These evaluations focus on preventing fraud, waste, or abuse and promoting economy, efficiency, and effectiveness of departmental programs. To promote impact, OEI reports also present practical recommendations for improving program operations. Office of Investigations The Office of Investigations (OI) conducts criminal, civil, and administrative investigations of fraud and misconduct related to HHS programs, operations, and beneficiaries. With investigators working in all 50 States and the District of Columbia, OI utilizes its resources by actively coordinating with the Department of Justice and other Federal, State, and local law enforcement authorities. The investigative efforts of OI often lead to criminal convictions, administrative sanctions, and/or civil monetary penalties. Office of Counsel to the Inspector General The Office of Counsel to the Inspector General (OCIG) provides general legal services to OIG, rendering advice and opinions on HHS programs and operations and providing all legal support for OIG’s internal operations. OCIG represents OIG in all civil and administrative fraud and abuse cases involving HHS programs, including False Claims Act, program exclusion, and civil monetary penalty cases. In connection with these cases, OCIG also negotiates and monitors corporate integrity agreements. OCIG renders advisory opinions, issues compliance program guidance, publishes fraud alerts, and provides other guidance to the health care industry concerning the anti-kickback statute and other OIG enforcement authorities. Notices THIS REPORT IS AVAILABLE TO THE PUBLIC at https://oig.hhs.gov Section 8M of the Inspector General Act, 5 U.S.C. App., requires that OIG post its publicly available reports on the OIG Web site. OFFICE OF AUDIT SERVICES FINDINGS AND OPINIONS The designation of financial or management practices as questionable, a recommendation for the disallowance of costs incurred or claimed, and any other conclusions and recommendations in this report represent the findings and opinions of OAS. Authorized officials of the HHS operating divisions will make final determination on these matters. Report in Brief Date: December 2018 Report No. A-09-17-02002 Why OIG Did This Review California Made Medicaid Payments on Behalf of Historically, only certain groups of individuals who had incomes and Non-Newly Eligible Beneficiaries Who Did Not Meet assets below certain thresholds were Federal and State Requirements eligible for Medicaid (traditional coverage groups). After the passage of the Patient Protection and What OIG Found Affordable Care Act (ACA), many For our sample of 125 beneficiaries, California made payments on behalf of beneficiaries remained eligible under 60 eligible beneficiaries. However, for the remaining 65 beneficiaries, these traditional coverage groups. California made payments on behalf of ineligible beneficiaries (e.g., a We refer to these beneficiaries as beneficiary who did not meet the income requirement for the medically “non-newly eligible beneficiaries.” needy coverage group) and potentially ineligible beneficiaries (e.g., This review is part of an ongoing beneficiaries for whom there was no documentation to support that series of OIG reviews of States’ California redetermined eligibility as required). On the basis of our sample Medicaid eligibility determinations. results, we estimated that California made Medicaid payments of We conducted these reviews to $959.3 million ($536 million Federal share) on behalf of 802,742 ineligible beneficiaries and $4.5 billion ($2.6 billion Federal share) on behalf of address the concern that States might have difficulty accurately 3.1 million potentially ineligible beneficiaries. (These estimates represent determining eligibility for Medicaid Medicaid payments for fee-for-service, managed-care, drug treatment beneficiaries. program, and mental health services.) According to California, these deficiencies occurred because (1) the counties experienced “a massive influx Our objective was to determine of applications for Medicaid and vast changes in policy brought forth by the whether California made Medicaid ACA,” (2) eligibility caseworkers made errors, and (3) system delays occurred payments on behalf of non-newly during a system conversion. eligible beneficiaries who did not meet Federal and State eligibility We also identified a weakness in California’s procedures related to determining eligibility of individuals who may not have intended to apply for requirements. Medicaid. How OIG Did This Review We reviewed a stratified random What OIG Recommends and California Comments sample of 125 non-newly eligible We recommend that California redetermine, if necessary, the current beneficiaries for whom Medicaid Medicaid eligibility of the sampled beneficiaries and ensure that (1) all payments were made for services eligibility requirements are verified properly and annual redeterminations are provided from October 2014 through performed as required, (2) information is maintained in case files to support March 2015. We reviewed eligibility determinations, and (3) eligibility determinations are performed only supporting documentation to for individuals who apply for Medicaid. The “Recommendations” section in determine whether California made the body of the report lists in detail our recommendations. payments on behalf of beneficiaries who did not meet Federal and State California agreed with our findings. California partly agreed with our recommendation regarding beneficiaries determined eligible for Medicaid eligibility requirements for the non- newly eligible group (e.g., income, based on eligibility for another assistance program, but it provided information citizenship, and pregnancy on actions being taken to address this recommendation. Although California did requirements). not explicitly agree or disagree with our other recommendations, it provided information on actions that it had taken or planned to take to address those recommendations. The full report can be found at https://oig.hhs.gov/oas/reports/region9/91702022.asp. TABLE OF CONTENTS INTRODUCTION ............................................................................................................................... 1 Why We Did This Review .................................................................................................... 1 Objective ............................................................................................................................. 1 Background ......................................................................................................................... 1 The Medicaid Program ............................................................................................ 1 Medicaid Coverage and Changes to Medicaid Eligibility Rules Under the Affordable Care Act............................................................................. 2 Medicaid Eligibility Verification Requirements....................................................... 3 California’s Process for Determining Medicaid Eligibility ....................................... 4 How We Conducted This Review ........................................................................................ 7 FINDINGS ........................................................................................................................................ 8 The State Agency Made Medicaid Payments on Behalf of Beneficiaries Who Did Not Meet Eligibility Requirements .......................................................................................... 9 Payments Were Made on Behalf of a Beneficiary Who Did Not Meet the Citizenship Requirement ...................................................................................... 9 Payments Were Made on Behalf of a Beneficiary Who Did Not Meet the Residency Requirement ..................................................................................... 10 Payments Were Made
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