Medicaid is administered by the Department of Health and Human Services (HHS) in partnership with the states, and is the primary source of health coverage for over 50 million Americans. Enacted in 1965, as Title XIX of the Social Security Act, Medicaid provides coverage to lower-income individuals, children, and families who often do not have access to other sources of health insurance. The Medicaid program also provides long-term care services and support to seniors and individuals of all ages with disabilities.
Agency Accountable Official: Ellen Murray, Assistant Secretary for Financial Resources
Program Accountable Official: Shantanu Agrawal, M.D., Deputy Administrator and Director for the Center for Program Integrity, Centers for Medicare & Medicaid Services
All amounts are in billions of dollars
Note: HHS calculated and is reporting a rolling national improper payment rate that is based on measurements that were conducted in Fiscal Years (FYs) 2013, 2014, and 2015.
Because Medicaid payments are susceptible to improper payments, the federal government and states have a strong financial interest in ensuring that claims are paid accurately. HHS has developed a multi-faceted strategy to measure the national payment error rate for Medicaid, through the Payment Error Rate Measurement (PERM) program. Medicaid’s Fee-For-Service (FFS) and managed care components are measured by federal contractors. In the past, states led the effort in measuring errors in eligibility. The program is measured using a 17-state, 3-year rotation to produce and report national program error rates. All improper payment rate calculations for Medicaid are based on the ratio of estimated dollars of improper payments to the estimated dollars of total payments. Individual state improper payment rate components are combined to calculate national component improper payment rates and individual state Medicaid program improper payment component rates are combined to calculate the national Medicaid program improper payment rate.
For FYs 2015 through 2018, eligibility reviews are on hold while HHS develops a new eligibility review methodology. During this time, the FY 2014 national eligibility improper payment rate (3.1 percent) is used as a proxy in the overall improper payment rate calculation. In place of the FYs 2015 through 2018 PERM eligibility reviews, all states are required to conduct eligibility review pilots. The eligibility review pilots provide more targeted, detailed information on the accuracy of eligibility determinations. The pilots use targeted measurements to: provide state-by-state programmatic assessments of the performance of new processes and systems in adjudicating eligibility; identify strengths and weaknesses in operations and systems leading to errors; and test the effectiveness of corrections and improvements in reducing or eliminating those errors.
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