A new vision for Medicaid — from the people who rely on it

Terry Gerton You’ve got a new report out looking at. Home and community based care in Medicaid, and you start from a pretty clear premise I think that fraud in Medicaid has to be addressed, but not at the expense of the people the program is meant to serve. Walk us through who this program is to serve and what you’re seeing in that balance right now.

Leslie Ford Yes, so Medicaid at its foundation, it was set up in 1965 by Lyndon B. Johnson. At its foundation it was meant to serve individuals with disabilities. That’s one of the core premises of this program. So individuals with severe disabilities, someone living with cerebral palsy, a child with Down syndrome. We want to keep them in our communities and so that’s a premise of Medicaid. But when Medicaid was first set up, the only real care we could provide for these institution was kind of in an institutional type setting. A nursing home or a hospital away from their communities, away from their families. It was a really sterile environment. In the 1980s, Ronald Reagan came in and he said, this was really inhumane. He met a little girl named Katie Beckett, and she could have lived at home. We had the technology to let her at home, but the laws didn’t allow it. And he ended that. And that’s when home and community-based service came into being. So, this is a lifeline for people who have severe disabilities. And most states, every single state has a waiver to allow just them to spend Medicaid funds, federal Medicaid funds for this incredibly important program. But you’ve probably heard a lot that there’s a significant amount of fraud in the program when we don’t have really good oversight. So we’re trying to balance these two things. It’s absolutely essential for people with severe disabilities in this country. We have to make sure we’re watching these funds appropriately.

Terry Gerton There’s a descriptive sentence in here that that really caught my eye and it says ‘there is typically great inefficiency in state HCBS program administration which has layers of vendors or consultants on contracts with states to manage eligibility financial reimbursements and care.’ When a system is structured like that and it’s focused on delivering care to the most vulnerable there are going to be opportunities for folks, bad actors, to take advantage of that system. Where, when you talk about waste fraud and abuse in this space, what does that actually look like in practice?

Leslie Ford Yeah, when we when we talk to administrators in this program, and we talk to administrators across the nation, red states, blue states, and one administrator described it as a lasagna of providers. It’s not just a government official at the top, a provider in between, and an individual with a disability at receiving end. You’re talking 10 to 20 providers in between that individual, that family with a disability, and the government official at top. You have a provider who’s going out and monitoring the other providers. You have a provider who’s doing eligibility checks, and you have, you know, five to 10 in between. So when you have that many providers in between the government who’s setting the budget or trying to set the budget, and a family who’s just trying to get by at the other end, that’s where you see the radical inefficiencies start to happen. And so the second part of your question, fraud, waste, and abuse, we kind of group these things together, and they actually mean three really different things. And so when we’re trying to tackle radical inefficiencies, we’re talking billions and billions of dollars of money that’s not really making it to our end goal, we are going to have different solutions to make sure we’re actually making sure our taxpayer dollars are making it to the individual who really needs it. So, fraud. This means, you said you were billing to get services to someone who has an individual disability. You never showed up. You billed, you never deliver the services at all. Straight fraud, you broke the law, we’re going to come after you. You’re going either pay a lot of money or go to jail. That’s what the fraud is. Waste, it’s technically legal. This is government officials not overseeing the program well. Something that might be waste here is I’m going to bring up New York as an example here. So, New York, over the past eight years, their program more than tripled in size. And it’s not serving that many more people. But there’s something in HCBS called an activity of daily living. We call it an ADL. This is one of the ways we define, do you really need help in your home? How severe is your disability? And if I have cerebral palsy, for instance, I need 24/7 care. I have a lot of activities of daily-living. I need help getting out of bed in the morning, I need help showering. If someone doesn’t come, I might die that day. I can’t get water. Now, that’s 20 activities of daily living to get me through my day. If I have one ADL, that might be I need help dressing. Maybe. That’s not a severe disability. So New York’s HCBS program broadened their eligibility quite a lot to just one ADL. That increased their program quite substantially. In 2020, they looked at it and they realized, oh wow, one ADL isn’t actually a severe enough disability to really put someone on our program, and they raised it to three ADLs. That’s an example of government oversight where it might be legal, but it might also lead to wasting dollars. Okay, so we have fraud, we have waste. Let’s look at abuse. I think abuse might be in the category that we’re hearing about a lot right now in autism services. Obviously, we are much better at diagnosing children and adults with autism right now, and we have many more ways to serve those children and adult with autism. But there are many more unscrupulous actors coming into that environment right now. We’ve heard the Wall Street Journal reporting on cases in Indiana and across the nation. Cases where providers are billing $30,000 a day for autism services. $900,000 a year for a child with autism services while they’re paying – now who’s providing those services? Someone with a high school education getting paid $20 an hour. So there’s – that’s clearly abuse. It’s technically legal, clearly abuse. So we have fraud, you’re not doing anything. Waste. That’s really bad oversight. Abuse. You’re technically within the law. You’re just stretching the law like wild. Fraud, waste and abuse.

Terry Gerton Leslie Ford is a senior fellow in the Able Americans program at the National Center for Public Policy Research. Leslie, that is a really helpful framing to get folks really kind of keyed in on what you’re looking at here. The report offers six recommendations for tackling that. Tackling waste, fraud, and abuse in Medicaid is high on the Trump administration’s list. What are your recommendations here?

Leslie Ford Yes, I mean, this is, we’re going to step back, we are going to look at radical transparency. So if you were to talk to any family who’s on this program, any parent who has a child who has participated in the program, they’re going say the first thing is, I have no idea what’s going on. If I’m on a wait list, and the majority of people who are on wait list is someone with an intellectual disability, you know, 75% of these people. I don’t know where I’m on a wait list. I don’t know when I’m going to get off the wait list, I could be waiting for eight years to get the services I need to survive on a day-to-day basis. Let’s get radical transparency into wait lists. Let’s get radical transparency to who the providers are and how much they’re charging. So number one is transparency. Two, we have CMS’ Center for Medicaid and Medicaid Services, they’re the federal oversight of the states who oversee this program. They oversee improper payments, but they don’t really have a continuous mechanism for overseeing fraud. And they could do that. So we should have a continuously mechanism for overseeing fraud. Three, we really, truly need to implement state oversight. And the states need to really take that by the reins. So one of those things could be third party auditors. Only three states have third-party auditors who are taking a look at their billing codes. It’s not just enough to say, hey, I’m going to be looking at that. You really do have to bring an outside consultant in to have a second look at them. Fourth is, we’ve talked about that lasagna providers in between those government officials and those families who are caring, you know, providing 20 to 30 hours of care for those families, those family members with disabilities. We should be empowering those families and those individuals with disabilities. They should be in charge of those dollars. They should able to choose the providers who best serve them. And honestly, they don’t have any of that right now. We have the mechanisms to do that. We could empower them. So fourth is empowering those recipients. Fifth is something we would think is obvious, but we should be measuring outcomes for the success of these programs. Like states, how many people or are you moving off your wait list? How healthy are you keeping these people in your programs? Are you even setting up a measure of success? We should be measuring outcomes. And six, we have to set up honest to goodness guardrails around public integrity for the providers who are in this program. The fraud, waste and abuse is really laid at the feet of the providers who are taking advantage of the system. So those guardrails are incredibly important. It can be as simple as saying, if you are a provider in any state across the nation, you have to disclose every single entity that’s billing Medicaid. We don’t know if you’re in one state billing Medicaid and in another state in a different entity with a different LLC billing Medicaid for something else. Bad actors will set up many different entities in order to avoid red flags in the system. Those are just some basic good governance reforms that Congress or the administration or states could take to make sure that we tamp down on fraud, waste and abuse.

Terry Gerton So there’s always a challenge in these sorts of public benefits programs when you tighten up oversight that you make access to the program more challenging. If CMS were to take on your recommendations, how would you want them to manage that balance? Making sure that folks who need the services can get them, but that there is appropriate oversight to make sure that the system is being administered well.

Leslie Ford Yeah, as we developed these six recommendations, that was at the heart of our consideration was the families who are at the hard of it, the individual with the disability. So putting transparency first was talking to every family that we have in our network. What do you need? And the first thing they told us was, I would just like to know who the providers are. I would like a list. I would like to know where my kid is on the wait list. I would just like to know. Hey, if we relocate to a different state, what the steps are on that state and how long it would take us to get off the wait list in that state. These recommendations are actually crowdsourced from the families in the program. So when we’re making these recommendations, they are at the heart putting the individual with a disability, putting their caregivers at the heart of the program.”