Hospital Presumptive Eligibility Results in Massive Medicaid Fraud, New Study Shows

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Naples, FL — The vast majority of individuals deemed “presumptively eligible” for Medicaid by hospitals are ineligible for the program or never completed an application, according to new research from the Foundation for Government Accountability (FGA). in 2018, just 30 percent of those deemed eligible by hospitals were actually verified—meaning 70 percent were later found to be ineligible, or did not complete the application process before being ushered into the program.

Though originally intended to be a state-by-state option to allow eligible pregnant women and children to receive Medicaid while their applications were pending, ObamaCare rules forced states to accept hospital’s presumptive eligibility determinations for all able-bodied adults. This move massively expanded Medicaid waste, fraud, and abuse, and left taxpayers stuck with the bill.

Typically, when a Medicaid provider or applicant commits fraud, or even unintentionally wastes Medicaid funds, the state and federal government have options available to recoup the wasted tax dollars. However, hospital-related improper payments are treated differently. In fact, states and the federal government are forbidden from collecting overpayments from the hospitals, even when they incorrectly enroll ineligible individuals into temporary Medicaid.

Further, federal rules do not require states to regularly verify which presumptively eligible Medicaid recipients are actually eligible. Worse, federal rules make it difficult for states to disqualify poorly performing hospitals from participating in the program.

“Hospital presumptive eligibility for able-bodied adults is fraud by design. Medicaid already has a huge problem with improper payments and this bad policy pours gasoline on that fire,” said Sam Adolphsen, policy director at FGA. “Even worse, states cannot recoup any of the tax dollars that are misspent as a result of this policy, and at a time when Medicaid is already breaking their state budget, that is just unacceptable. Thankfully, states and the Trump administration can take action to stop this mess, and they should.”

Read the full paper here.

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The Foundation for Government Accountability is a non-profit, multi-state think tank that specializes in health care, welfare, and work reform. To learn more, visit TheFGA.org.