Medicaid is now the fastest-growing expenditure in most states, often crowding out funding for education and social services.
CMS Administrator Dr. Mehmet Oz drew attention to this during a presentation this week at Sanford Health's annual Summit on the Future of Rural Healthcare in Sioux Falls, South Dakota.
He noted that federal Medicaid spending has increased by 50% over the past five years, much of it related to policies that were not eliminated during the pandemic. From Dr. Oz's perspective, this provides an opportunity for states and providers to “game” the system.
“Of course, no matter what you think, legalized money laundering through state-directed payments and provider taxes is inconsistent with the federal and state governments. They're doing exactly the opposite. It's a catch-all, and states can take as much as they can from the federal government. Typically, states have different capabilities, so some states take a lot and others don't,” he commented.
Essentially, Dr. Oz was criticizing Medicaid's financing mechanism, which allows states to draw down additional federal funds. Many states tax hospitals, nursing homes and other health care providers and then use those revenues, along with state-directed payments, to trigger additional Medicaid matching funds from the federal government, he said.
Dr. Oz also said in his speech that fraud is widespread in the Medicaid and Medicare programs. To combat this fraud, CMS is now focused on supporting the flow of funds rather than going after individual bad actors, he said.
“We're really after money right now, not people. We've already taken action jointly with the Treasury Department and the Justice Department to address some of these issues that you're going to hear more about. We've prevented about $4 billion from leaving the building by using tactics like this,” he said.
Overall, Dr. Oz said CMS is committed to working with other departments to recover misappropriated funds and shut down schemes that exploit vulnerabilities in the system.
He believes this strategy allows the government to act more quickly and effectively to ensure that federal health care dollars reach the patients and programs they are intended to serve.
“We have to follow these plans and come up with smart ideas to help the good people who are trying to do the right thing and separate the wheat from the chaff from the people who are cheating the country and, by doing so, positively change the incentives for some of these businesses,” Dr. Oz announced.
In his view, greater oversight and realignment of incentives within CMS would redirect billions of dollars toward more legitimate health care delivery efforts.
Photo: Sanford Health
