Medicaid: Additional Federal Controls Needed to Improve Accuracy of Eligibility Determinations and for Coordination with Exchanges

GAO-16-157T Published: Oct 23, 2015. Publicly Released: Oct 22, 2015.
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What GAO Found

Beginning in 2014, the Patient Protection and Affordable Care Act (PPACA) provided millions of low-income Americans new options for obtaining health insurance coverage—through the Medicaid program or by purchasing private health insurance through an exchange. Although the Centers for Medicare & Medicaid Services (CMS) has taken some steps, GAO identified gaps in its oversight of Medicaid enrollment and coordination with the exchanges resulting from the PPACA expansion.

  • Oversight of Medicaid Enrollment:CMS has implemented interim measures to review the accuracy of state eligibility determinations and examine states’ expenditures for different eligibility groups, for which states may receive up to three different federal matching rates. However, GAO found that CMS has excluded from review federal Medicaid eligibility determinations in the states that have delegated authority to the federal government to make Medicaid eligibility determinations through the federal exchange. GAO also found that CMS reviews of states’ expenditures do not use information obtained from the reviews of state eligibility determination errors to better target its review of Medicaid expenditures for the different eligibility groups. GAO concluded that CMS cannot identify erroneous expenditures due to incorrect eligibility determinations, which also limits its ability to ensure that state expenditures are appropriately matched with federal funds. GAO recommended that CMS (1) review federal determinations of Medicaid eligibility for accuracy, and (2) use the information obtained from state and federal eligibility reviews to inform the agency’s review of expenditures for different eligibility groups in order to ensure that expenditures are reported correctly and appropriately matched. The agency generally concurred with these recommendations.
  • Coordination between Medicaid and Exchanges:CMS implemented several policies and procedures, and has additional controls planned that represent positive steps toward minimizing the potential for coverage gaps and duplicate coverage in states with a federal exchange. However, GAO found that CMS’s policies and procedures do not sufficiently minimize the potential for coverage gaps and duplicate coverage in states with a federal exchange. GAO found that individuals transitioning from Medicaid to exchange coverage may experience coverage gaps, for example, if they lose Medicaid eligibility toward the end of a month. In addition, GAO found that some individuals had duplicate coverage. While some amount of duplicate coverage is permissible under federal law—and may be expected during the transition from exchange to Medicaid coverage—duplicate coverage was also occurring under other scenarios, such as when individuals do not end their subsidized exchange coverage after being determined eligible for Medicaid. GAO concluded that CMS’s controls may put some individuals at greater risk of experiencing coverage gaps. In addition, GAO found weaknesses in CMS’s controls for preventing, detecting, and resolving duplicate coverage, making it difficult for the agency to provide reasonable assurance that its procedures are sufficient or whether additional steps are needed. GAO recommended that CMS take three actions, including (1) routinely monitoring the timeliness of account transfers from states, (2) establishing a schedule for regular checks for duplicate coverage, and (3) developing a plan to monitor the effectiveness of the checks. The agency concurred with these recommendations.

Why GAO Did This Study

This testimony summarizes two GAO reports addressing issues related to federal oversight of Medicaid eligibility determinations and coordination between Medicaid and the exchanges: 

 (1) GAO, Medicaid: Additional Efforts Needed to Ensure that State Spending is Appropriately Matched with Federal Funds, GAO-16-53 (Washington, D.C.: October 16, 2015) and

 (2) GAO, Medicaid and Insurance Exchanges: Additional Federal Controls Needed to Minimize Potential for Gaps and Duplication in Coverage, GAO-16-73 (Washington, D.C.: October 9, 2015).

For more information, contact Carolyn L. Yocom at 202-512- 7114 or

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