Massachusetts Overbills Feds $106M for Medicaid
Policy + Politics

Massachusetts Overbills Feds $106M for Medicaid

  • State overbilling costs taxpayers millions each year
  • A miscalculation affecting 2.4 million claims

iStockphoto/The Fiscal Times

For years, states have significantly overbilled the federal government for Medicaid reimbursements—costing the program hundreds of millions of extra tax dollars each year.

By using schemes to overstate how much they’ve spent to cover their programs’ beneficiaries, states like New York, Pennsylvania and North Carolina have all managed to skirt paying their full share of Medicaid costs.

Related: States are Defrauding the Feds on Medicaid Payments

Now, the Department of Health and Human Services Inspector General is flagging Massachusetts for similar practices. The IG found that the Bay State incorrectly calculated reimbursement rates for claims between 2008 and 2010—collecting $106 million more than it should have from the federal government.

Under the law, the government reimburses states for 50 percent of medical payments for Medicaid beneficiaries—though that rate was temporarily increased in the wake of the financial crisis to between 58.8 percent and 61.6 percent.

The IG found that the state improperly used this higher temporary reimbursement rate while processing at least 2.4 million claims that were made before that time period—resulting in the massive overpayment. 

The IG said Massachusetts should refund the federal government for the $106 million. And though the state did not dispute the auditors’ findings, it argued that the federal government owed $108 million additional Medicaid reimbursements for the January 2011 to September 2013 period—which would offset the requested refund, the Associated Press reported. 

The issue of states overbilling the federal government for Medicaid reimbursements was first flagged by federal auditors in 2001 and has frequented the IG’s annual list of 25 key problems that HHS needs to address in order to rein in health care spending.

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