Johnson Requests Data from CMS and State Governors on Medicaid Expansion’s Exploding Costs

News Release from US Senate Committee on Homeland Security and Governmental Affairs, September 27, 2017

WASHINGTON — U.S. Sen. Ron Johnson (R-Wis.), chairman of the Senate Homeland Security and Governmental Affairs Committee, sent letters Wednesday to the Centers for Medicare and Medicaid Services (CMS) Administrator and governors of eight states asking for information related to Medicaid expansion and the soaring costs that go far beyond initial projections.

“Federal Medicaid expenditures totaled $246 billion in fiscal year 2009, increased to $299 billion in fiscal year 2014 and are projected to rise 96 percent to $588 billion by 2025. A primary cause of this increase is the ACA Medicaid expansion,” Johnson wrote in the letter. “Current CMS and other data show original Medicaid expansion per-enrollee spending and overall enrollment projections were significantly understated. In 2014, CMS predicted per-enrollee spending on newly eligible adults in 2015 would be $4,281, but the actual amount was $6,365 (49 percent higher). Accordingly, CMS increased per-enrollee projections for fiscal year 2023 from $5,076 to $7,027 (38 percent higher).”

Similar letters were sent to the following state governors:

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Dear Governor Ige: September 27, 2017

Medicaid policies and procedures.

Federal Medicaid expenditures totaled $246 billion in fiscal year 2009, increased to $299 billion in fiscal year 2014 and are projected to rise 96 percent to $588 billion by 2025. A primary cause of this increase is the ACA Medicaid expansion. Current data from the Centers for Medicare & Medicaid Services (CMS) and other sources show original Medicaid expansion per-enrollee spending and overall enrollment projections were significantly understated. In 2014, CMS predicted per-enrollee spending on newly eligible adults in 2015 would be $4,281, but the actual amount was $6,365 (49 percent higher). Accordingly, CMS increased per-enrollee projections for fiscal year 2023 from $5,076 to $7,027 (38 percent higher).

In many expansion states, enrollment and expenditures are rising swiftly. CMS data show that total costs for new Medicaid beneficiaries in Hawaii rose from $249.1 million in 2014 to $437.4 million in 2015-a 76 percent single-year increase. Costs per-enrollee jumped 73 percent in that same period, going from $7,462 in 2014 to $12,910 in 2015.

I am seeking to better understand these rising costs and higher-than-expected enrollment, especially in states where costs or enrollment are increasing especially quickly. Accordingly, I respectfully request that you please provide the following information and material:

1. Please provide the following data relating to Medicaid expansion in Hawaii:

a. Enrollment of VIII Group Newly Eligible Enrollees under the ACA Medicaid expansion for calendar year 2016; b. Per-enrollee spending on newly eligible adults under the ACA Medicaid expansion for calendar year 2016; c. Enrollment of VIII Group Newly Eligible Enrollees under the ACA Medicaid expansion for calendar year 2017 to date; and d. Any quarterly reports for calendar year 2017 on enrollment figures and per enrollee spending.

2. Please explain why total costs for new Medicaid beneficiaries are rising so quickly in Hawaii and why per-enrollee costs under that expansion are rapidly increasing. Has Hawaii taken any steps to control these costs and, if so, what are those steps?

3. Please explain Hawaii's methodology for determining the eligibility thresholds for newly eligible enrollees under the ACA Medicaid expansion. Please also explain how Hawaii verifies that applications are accurate and that the enrollees qualify for the enhanced federal match rate for the expansion population.

4. Please explain whether Hawaii has commissioned or contemplated any audits to examine why the state's ACA Medicaid expansion costs are rising and whether any individuals have been misclassified as newly eligible. Please produce any such audits and all related documents and communications.

5. Please produce all documents and communications between or among employees or contractors of Hawaii referring or relating to the determination of eligibility for the "newly eligible" population under the ACA Medicaid expansion.

6. Please produce all documents and communications between or among employees or contractors of Hawaii and employees or contractors of insurance companies referring or relating to payment rates for insurance companies under the ACA Medicaid expansion.

I respectfully ask that you please provide this information as soon as possible, but no later than 5:00p.m. on October 11, 2017.

The Committee on Homeland Security and Governmental Affairs is authorized by Rule XXV of the Standing Rules of the Senate to investigate "the efficiency, economy, and effectiveness of all agencies and departments of the Government." Additionally, Rule XXV authorizes the Committee to study "the intergovernmental relationships between the United States and the States and municipalities."….

Sincerely,

Ron Johnson, Chairman

LINK: Footnotes

Ige Response Oct 11, 2017:

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