Virginia Republicans seek to audit state Medicaid program
Concerns voiced over unnecessary services, excessive costs and inefficiency
Republicans in the Virginia House of Delegates called for an audit of Virginia Medicaid programs Monday in response to a proposed expansion of the program to low-income Virginians.
Medicaid expansion, one of Gov. Terry McAuliffe’s primary goals for his term, is also in line with President Barack Obama’s expressed health care policy goals. The federal government would take on the full costs of the first three years of Medicaid expansion in Virginia under the Affordable Care Act. After the first three years, the state would cover 90 percent of costs.
According to the Department of Medical Assistance Services, expansion costs could net more than $1 billion of additional federal funding by 2022.
House Republicans, however, have expressed concerns with expansion and have asked for a full external audit of the state Medicaid program. There has never been an audit of Medicaid in Virginia.
“We spend $9 billion a year on Medicaid … what we’re hearing is that 30 percent of Medicaid is waste, fraud and inefficiencies,” Del. Jimmie Massie, R-Henrico, said.
In a report published in December, DMAS listed unnecessary services, excessive administration costs and inefficiently delivered services as the three largest sources of the waste that comprises an estimated 30 percent of Medicaid spending. About 10 percent of that waste is attributed to fraud within the system.
Republicans are also concerned about the federal deficit and potential future cutbacks, which would reverse coverage promises made under the Affordable Care Act.
“It’s hard for me to say I trust [the federal government],” Massie said. “In the meantime, we’re getting to watch all the other states [who have expanded Medicaid] and learn from them … and would like to end up with a better product.”
In a statement last Monday, McAuliffe stressed the proposed audit would delay Virginians receiving health coverage.
“We cannot … afford to use an ongoing audit as the latest excuse to deny 400,000 Virginians access to quality medical and mental health care, to leave billions of dollars of federal funding on the table and deny taxpayers the savings that we would reap if we move forward immediately,” he said. “Running an efficient and cost-effective program is key, but so is taking action to expand access to Virginia families, create jobs and reduce the cost of care.”
Republicans have also expressed concern about the additional costs the state would accrue as eligible people not currently enrolled would now choose to claim Medicaid benefits.
“[It] appears that there are a lot of people coming on who are already eligible, and that will cost the state a lot of money,” Public Policy Prof. Raymond Scheppach said.
Democrats, as well as those in the the health services community, are already seeking to take advantage of the large increase in federal funding.
“It’s a phenomenal amount of money, and so, politically looking at it, the entire health care community is in support of it,” Scheppach said.
To cut costs, however, the federal government will look to cut down on money given to subsidize costs taken on by hospitals in treating uninsured people in need of medical care, Scheppach said.
“The business community is also in support, because uninsured people who still seek some medical care end up burdening the system,” Scheppach said. “If they don’t expand Medicaid, odds are some hospitals will go out of business.”
Twenty-six states have opted to expand Medicaid so far.
“[There’s] no question in my mind that most states will eventually do it, it may just take some time,” Scheppach said.