[V]ermont’s top health care official says there are people receiving Medicaid benefits who are not eligible, but officials are not sure how widespread the problem is.
An internal memo provided to VTDigger and the firsthand account of a local tax adviser highlight that beneficiary fraud, whether intentional or otherwise, could be a serious issue for Vermont’s Medicaid program. The adviser said he has a client who qualified for Medicaid despite earning more than $100,000 last year.
The state will resume routine checks of recipients’ eligibility in April, a process that was suspended with federal approval in August 2013. In the interim, more than 85,000 people have enrolled in the low-income health coverage program since the launch of Vermont Health Connect in October 2013.
“I am absolutely certain that there are people who are on our Medicaid rolls who will come off at the next round of redetermination of eligibility,” said Lawrence Miller, chief of Health Care Reform. He would not speculate on how many people that could be.
The state is unlikely to pursue beneficiaries who may have incorrectly received Medicaid services, unless there is a clear indication of fraud, officials said.
Vermont Health Connect relies on applicants’ self-reported income, and the state is then responsible for verifying that information. A report last year by the Inspector General for the federal Agency of Health and Human Services found that Vermont was among several states having difficulty verifying people’s information.
An internal Vermont Health Connect report from Jan. 29 shows there are 11,955 people whose Modified Adjusted Gross Income — the IRS tax basis for determining Medicaid eligibility — has not been verified.
In the wake of the Affordable Care Act, Steve Cairns, a Stowe tax adviser, began asking his clients not just whether they had health insurance, but what type.
Already this tax season, Cairns has had two clients enrolled in Medicaid who appear not to be income eligible for the program, he said.
One client, who asked not to be identified but agreed to share his experience, said he earned close to $100,000 in the first half of 2014, before leaving his company. The expanded income eligibility should allow an individual earning up to about $15,800, and a family of four earning up to $32,500, to qualify for the program. There are no premiums and very few out-of-pocket costs for Medicaid coverage.
Working with a navigator to enter his information into the Vermont Health Connect portal, he qualified for Medicaid, and his children qualified for Dr. Dynosaur, Vermont’s Medicaid program for children, the client said.
“I told them how much I had already made and was fully expecting to pay something,” he said. “Who’s going to question it when they’re insisting you’re eligible for Medicaid?”
In November, the client went back to a navigator to renew his coverage for 2015. He had started his own business, but had yet to add to his income. Once again he was told that he qualified for Medicaid and that he did not need to purchase insurance.
In January, Cairns said he instructed the client to contact the state immediately and advise them of additional income from December. His client is in the process of doing that, they said.
But the exchange has had a backlog of changes requested or reported to them by users for the entire year. Some people likely qualified because they entered their information incorrectly, or because a requested change was never effectuated.
Other tax professionals are sharing stories with Cairns of their own clients who may incorrectly be receiving Medicaid coverage, he said. In many of those cases, college-age children who are still dependents — according to the IRS definition — are qualifying based on their own income, when their parents’ income would make them ineligible, Cairns said.
For Cairns, as a small business owner, the prospect of paying a payroll tax, as Gov. Peter Shumlin has proposed, to raise the reimbursement rates for what he described as a “runaway” program is upsetting, he said.
“The bottom line is that it appears there are lots of people on Medicaid that shouldn’t be,” Cairns said. He said he believes Vermont should focus on the program’s integrity before increasing what it pays doctors and hospitals.
