Illinois lawmakers challenge CMS rejection of anti-fraud law

The measure violates provisions of health system reform by changing Medicaid eligibility requirements, federal officials say.

By Alicia Gallegos — Posted Aug. 15, 2011

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Illinois lawmakers are urging the federal Centers for Medicare & Medicaid Services to reconsider its decision to block a state reform measure aimed at reducing health care fraud.

The law, which was scheduled to take effect July 1, required Medicaid applicants to provide one month of income documentation and show proof of residency to state officials before being enrolled. But CMS decided June 24 not to enforce the measure, saying the federal health system reform law prohibits states from changing Medicaid eligibility.

"As a condition of receiving federal Medicaid funding, states must maintain eligibility standards, methodologies and procedures that are no more restrictive than those in effect on March 23, 2010," Cindy Mann, director of the CMS Center for Medicaid, CHIP and Survey & Certification, wrote in a letter to the state. "The new law would require applicants to submit more documentation of both income and residency than is required under current Illinois law. ... Thus, such procedural changes would constitute a violation" of the Patient Protection and Affordable Care Act.

On July 18, U.S. Sen. Mark Kirk (R, Ill.), U.S. Rep. Judy Biggert (R, Illinois) and 10 other lawmakers sent a letter asking CMS Administrator Donald M. Berwick, MD, to review his agency's decision.

The Illinois Medicaid program is "under stress" and would be strengthened by keeping taxpayer money from those who don't qualify for assistance, the lawmakers said.

"The federal government should be working with us -- not against us -- to protect Illinois' Medicaid system for those who need it most," Biggert, who co-sponsored the state reform measure, said in a statement.

Looming budget crisis

The reform measure was never meant to change eligibility, but to verify eligibility, said state Rep. Patricia Bellock, a Republican. She said it seems contradictory that the federal government is considering widespread Medicaid funding cuts, while preventing states from more wisely allocating their funds.

"If we would tighten the system itself, we wouldn't have to make cuts," she said. "We want that care to go toward people it's designed for and to keep fraud out of the system." Better monitoring of Medicaid funding would be beneficial not only for needy patients, but for doctors and other health professionals providing necessary care, she said.

Like many states, Illinois faces a fiscal crisis, and Medicaid represents a significant portion of the state's budget. "Our Medicaid reforms would save Illinois taxpayers $800 million," Bellock said. "With our state budget facing its biggest crisis in decades, and numerous services facing cuts, this is no time for the federal government to stand in the way of common-sense reforms.

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