Michigan paid $2.4 billion in ‘improper payments’ to Medicaid, CHIP beneficiaries

(PresidentialHill.com)- An auditor has found that the Michigan Department of Health and Human Services has made billions of dollars in improper payments to recipients of both the Child Health Insurance Program and Medicaid.

The audit, conducted by the office of Auditor General Doug Ringler, found that the MDHHS didn’t always determine the eligibility of beneficiaries or maintain the proper documentation to support their eligibility. This is a “material condition” of the programs that could’ve resulted in improper payments totaling $89.5 million for CHIP and $2.3 billion for Medicaid just in fiscal year 2019

The audit found that 84% of all payments made to these two programs that year, or $12.6 billion total, was made appropriately to all eligible beneficiaries of CHIP and Medicaid.

In total, the state of Michigan paid $817 million to Medicaid beneficiaries improperly, as they didn’t have all the necessary eligibility documents. What’s more, CHIP beneficiaries that didn’t have all their case files were also paid out $25 million in improper benefits.

The two programs serve almost 3 million residents of Michigan.

As the audit found:

“MDHHS indicated it did not properly consider all available information when determining beneficiary eligibility because of system issues and staff actions. MDHHS also indicated internal control was not always sufficient to ensure documentation was retained.”

The agency didn’t completely agree with the assessment that was made by the auditing group, though. In fact, it disagreed with the methodology the OAG used, saying it “results in a grossly inflated estimate and an inaccurate representation of improper payments.”

The MDHHS continued:

“The calculation of improper payments used as the basis for the extrapolation failed to differentiate cases that lacked eligibility from those that were eligible but placed in a misclassified type of assistance or different benefits category and included cases that MDHHS disagrees were in error.”

The agency further said that a federal audit that was conducted by the Centers for Medicare and Medicaid would’ve better explained the difference between the disparities between the state and federal.

In response to the findings from the audit, the agency said:

“MDHHS does not agree that the entire amount cited is inappropriate federal reimbursement. All of these beneficiaries were Medicaid eligible, and all payments would have been eligible for regular [Federal Medical Assistance Percentage]. Therefore, the amount cited above is significantly overstated.”

Ringler’s office fired back, saying that they used official definitions of improper payments as set by federal law, and they also use software that’s widely accepted in the industry to conduct the audit.

In the meantime, the MDHHS said it would work on possible solutions to this problem. They are currently working to improve the program in the state of Michigan, and not because of the results of this audit, officials said.

As the agency tried to explain away:

“MDHHS can disagree with the OAG’s methodology, interpretation of policy, and determinations on particular cases without conceding our commitment to continuous improvement.”