Without an audit, Medicaid expansion shouldn't proceed

  • Article by: SEAN NIENOW
  • Updated: July 2, 2012 - 8:22 PM

There are too many unanswered questions about how the program is run in Minnesota.

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Last week, the Patient Protection and Affordable Care Act, including its individual mandate requiring virtually all Americans buy health insurance, was mostly upheld by the Supreme Court. Unless and until repealed, Obamacare is the law of the land.

A significant part of this federal law includes a large expansion of Medicaid -- subsidized health insurance for the poor -- a program riddled with fraud. Over the last several years, allegations have been made that Minnesota inflated Medicaid spending figures in order to receive additional, unwarranted taxpayer dollars from the federal government.

Congressional subcommittees of the House Oversight and Government Reform Committee held hearings regarding the lack of transparency, accountability and oversight of Medicaid funding in Minnesota and around the country. The final report from the hearings specifically cites Minnesota as an example of "how states are failing to properly ensure the appropriate use of taxpayer dollars spent."

Also, a recent federal Government Accountability Office report to Congress said that without corrective action in the program, we "continue to put billions of taxpayer dollars at risk of improper payments or waste."

With a massive expansion of Medicaid set to occur under Obamacare, the time to take action on accountability and transparency is now, not later.

The enormous expansion of Medicaid underscores the urgency for audits of the Minnesota Medicaid program administered under managed care. The same HMOs run both the Medicare and Medicaid programs, but historically Minnesota's Medicare costs have been among the lowest in the nation, while its Medicaid costs are among the highest -- even though Medicare is only for the elderly, who typically use more health care and are more expensive to cover.

On its face, something doesn't look right there. We simply cannot expand Medicaid under Obamacare without first auditing our system to get a true picture of what the legitimate costs should be. An expansion based on artificially inflated numbers would be an egregious waste of taxpayer dollars. We must get an accurate assessment of the current program before adding hundreds of thousands of people into Medicaid.

In Minnesota, Medicaid mainly is run by just four HMOs. Current state law prohibits market competition from other HMOs that would like to make a profit here, even though competition almost always lowers prices for the consumer. Expansion of Medicaid, if we are to avoid a cartel-like situation, must include opening Medicaid programs in our state to other HMO competitors.

Before Minnesota can move to a block grant system or any other appropriation from the federal government, we must have audits or we must make our Medicaid payment rates default to the Medicare rate in Minnesota, where we have accuracy and accountability.

I'm glad to say I was able to enact a state law requiring audits of these programs. But due to budget constraints, funding for that might not be available until 2015. I recently sent a letter to the federal Center for Medicaid and Medicare Services requesting an immediate audit of Minnesota's public health care programs.

The CMS can do this using the Medicaid Integrity Program included in the Social Security Act and expanded in the Patient Protection and Affordable Care Act. The center has the resources to commence an audit this year. With the conclusions reported after the two Oversight Committee hearings, the need to take action is critical.

Since half of the Minnesota Medicaid program is paid for with federal tax dollars, the federal government has a clear financial interest in finding any waste or fraud as soon as possible. If the CMS performs the audit now rather than waiting until Minnesota's audit, the federal government will get an immediate accounting of Medicaid spending in Minnesota. As an added benefit, Minnesota's future audits will be less expensive.

It's a classic win-win. The feds get the accountability needed to prevent fraud and abuse; the state saves time and money, and taxpayers get the transparency in government they deserve.

The best thing though -- those "billions of taxpayer dollars at risk" probably won't be so much at risk anymore.

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Sean Nienow, R-Cambridge, is a member of the Minnesota Senate.

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