government

Illinois to start unsanctioned Medicaid anti-fraud efforts

The state will enact a stricter residency verification system for enrollees, but federal officials have not yet signed off on it.

By Alicia Gallegos — Posted Feb. 27, 2012

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Illinois is moving forward with new anti-fraud measures in its Medicaid program, despite not having federal approval for the strategy.

Beginning in March, the state will match Medicaid enrollees' addresses with the state's directory of driving records, among other efforts, to ensure that assistance is going only to Illinois residents. The measures were developed as part of the Legislature's 2011 Medicaid reform law, which mandated changes to the Illinois Medicaid program and its Children's Health Insurance Program.

But federal Medicaid officials expressed concern that the state's plan could violate federal maintenance-of-effort requirements under the national health system reform law. Those provisions require states to maintain certain eligibility levels and enrollment procedures for Medicaid until the Dept. of Health and Human Services deems the states' new health insurance exchanges to be fully operational, which won't happen until closer to 2014.

Part of Illinois' anti-fraud plan requiring residents to show additional proof of residency and income to confirm their status violates the federal requirements, Victoria Wachino said in a letter to the state. Wachino is director of the Children and Adults Health Programs Group at the Centers for Medicare & Medicaid Services. She said verifying names electronically is the best way to confirm Medicaid eligibility and that Illinois should use that method.

In a Feb. 7 letter to CMS, Julie Hamos, director of the Illinois Healthcare and Family Services Dept., said the state has enhanced its electronic verifications but also intends to move ahead with its residency verification plan.

"We have determined that the changes we are making to verify Illinois residency are not violations" of the health reform law's maintenance-of-effort provisions, she said.

Funding impact unclear

The state must implement its anti-fraud plan for the sake of the Medicaid program, said Mike Claffey, a spokesman for the Illinois Healthcare and Family Services Dept. A recent study by the department showed nearly 6% of medical identification cards sent to households in November 2011 were returned to the agency as undeliverable with out-of-state forwarding addresses.

"We've been going back and forth" with CMS, Claffey said. "We really wanted to start this July 1, [2011,] but we kept pushing it back waiting for approval. We didn't want to wait another six months."

The state receives 50% federal matching funds for its Medicaid program, but it remained unclear whether CMS would seek to withhold the money if the state moves ahead with the unsanctioned strategy. In a statement, CMS said only that it is reviewing the state's most recent correspondence about its anti-fraud plan.

"We requested additional information from Illinois regarding the nature of their program integrity concerns, and we are reviewing this response," said CMS spokesman Alper Ozinal. "We are committed to giving Illinois and all states the ability to maintain the integrity of their Medicaid programs, while ensuring that beneficiaries continue to receive access to the care they need to live healthier lives."

Claffey said state officials hope the federal government will approve the anti-fraud plan. The officials want "to ensure those who are being served are absolutely entitled to receive those services."

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