States Stymied in $4.3B Medicaid Collection Efforts

Matt Salo, executive director of the NAMD, told HealthLeaders Media that the waiver proposal was the ideal solution because "it didn't require the federal government to write a huge check." Instead HHS would have issued credits to reimburse states for their share of the erroneous Medicaid payments. The credits could have been used to meet a state's share of its current Medicaid expenditures.

Salo says he's unsure what will happen next, adding, "We've been working to resolve this issue for a long time."

The SSA has long contended that the only remedy available to states is to recoup from providers the mistaken Medicaid payments and then to have those providers file Medicare claims for the medical services. Salo said the effort to chase down decades-old medical records for patients and providers would be fruitless. "Providers could be dead, retired, relocated and their practices closed. They aren't going to want to go through this process," he says.

In her letter, Secretary Sebelius referred to court cases brought by New York and Massachusetts, which stand to gain $414.4 million and $158.3 million, respectively. "The courts concluded that nothing in either the federal Medicare or Medicaid acts authorizes the Medicare program to directly reimburse states for these expenditures," she wrote.

NAMD has tried unsuccessfully to get federal legislation passed to provide for the repayment, Salo says. "The current political climate just doesn't allow for this kind of expenditure."