Passage of the Families First Corona Virus Response Act authorized the Centers for Medicare and Medicaid Services (CMS) to augment federal medical assistance percentage (FMAP) by 6.2% for states agreeing to comply with continuous enrollment provisions, among other requirements including prohibition on cost sharing for COVID-19 related testing, services, therapeutics, and vaccines. Continuous enrollment prohibited states from disenrolling anyone from Medicaid unless one of three conditions were met: the person expressly requested termination, the person died, or the person moved out of state.

In a review of four states (NY, FL, TX, MN), receiving $12.8 billion in additional FMAP from the 6.2% increase, the Office of Inspector General (OIG) found that all four states either violated or potentially violated requirements outlined for continuous enrollment or cost sharing prohibitions therefore possibly receiving erroneous FMAP enhancement. Both New York and Florida could not substantiate that a subset of terminations were for allowable reasons while Texas terminated coverage for unallowable reasons, and Minnesota could not demonstrate reasons for coverage terminations for some while simultaneously improperly terminating others. Minnesota, through managed care encounter data with diagnosis codes inclusive of COVID testing and treatment, included patient pay liabilities totaling more than $950,000—leaving the possibility that some enrollees were charged cost-sharing for these services.

CMS agreed with recommendations from the draft OIG audit suggesting that CMS work with states to determine if any enhanced FMAP should be returned to the Federal Government and CMS should work with MN to determine if any enrollees were charged cost-sharing and determine how to reimburse the enrollee for incurred out-of-pocket expenses.

View the full report here.