Alabama May Lose Medicaid Funding for Cutting Off Some Enrollees

Alabama says it’s just trying to protect its coffers from being pilfered by criminals, but the Centers for Medicare & Medicaid Services is taking a hard look at how the state is handling cases of alleged fraud by Medicaid enrollees. The state acknowledges that it rejects people who would otherwise be eligible for Medicaid funding if those individuals “have been found” to have engaged in fraud—even if they were never convicted of a crime, which is where CMS says the state may be overstepping its bounds. CMS posted a notice saying the agency “supports state efforts to appropriately address fraud and abuse, and federal law and regulations provide mechanisms to do so,” but maintains that the proper procedure for addressing such wrongs would be to refer the case to law enforcement to investigate fraud, not make a unilateral decision to simply cut off those individuals. CMS has given Alabama officials 30 days to request a hearing. If the issues aren’t resolved to CMS’s liking, it can reduce Alabama’s administrative Medicaid budget by 1% starting the next fiscal quarter. The amount would increase by 1% every quarter during which the state remains out of compliance. In fiscal 2015, the state’s administrative Medicaid budget was $231 million.