Federal Audit Says Missouri ‘Improperly Reaped’ $1.6B from Medicaid Program
CMS Administrator Tom Scully has "threatened" to withhold millions of dollars in federal funds from Missouri based on a federal audit that found the state has "improperly reaped" more than $1.6 billion from Medicaid, the St. Louis Post-Dispatch reports. Missouri imposes a tax on hospitals and nursing homes to help finance the state's Medicaid program; the federal government matches the revenue raised by the tax. A recent federal audit says that the system, which was developed by the Missouri Hospital Association, violates a 1991 law because it redistributes the tax revenue to the health facilities and "guarantees that each [facility] will get back what it has paid through the tax." The audit adds that "the full burden of the tax falls only on the Medicaid program." In a "sharply worded" letter sent to Missouri Gov. Bob Holden (D) on Nov. 29, Scully wrote that the state has not responded to "repeated outreach efforts" by the federal government to resolve the problem. "I have done everything imaginable to get the state's attention on this issue ... to no avail," Scully wrote, adding, "The state appears to be intent on forcing me to make decisions that are most certainly not in its interests."
State Officials 'Surprised'
However, Missouri officials, "surprised by the tone and tenor of the letter," said that they have moved to "resolve the matter" with Scully. Katherine Martin, director of the Missouri Department of Social Services, said, "We were in the process of working with him ... [W]e were getting very close to presenting" a proposal to address the issue. She added, "He's definitely raising the stakes by making the threat." Missouri officials called the tax "perfectly legal." Martin said, "It is legal ... and we're very comfortable going to bat with it." She added, however, that she would "proceed with her efforts to create an alternative program" to address concerns that Scully has raised. Jerry Nachtigal, a spokesperson for Holden, said that the governor would "respond promptly" to the letter. According to some Missouri lawmakers, "any effort to recoup the funds" from the state would "devastate Missouri's health care system." Sen. Jean Carnahan (D-Mo.) said, "If they're going to ask us to return $1.6 billion, that's going to tear up the program. It's not like we're using these funds to build roads. We're using these funds ... to serve the health care needs of our state" (Shesgreen, St. Louis Post-Dispatch, 12/3).
