OIG: Ohio, Kansas got millions in improper bonus payments from feds under CHIP law

Man looking at documents with magnifying glass
The OIG has identified CHIPRA bonus payments as “a high-risk area.” (Getty/AndreyPopov)

Two states received millions of dollars’ worth of unallowable bonus payments that are meant to offset the cost of enrolling children in Medicaid, according to a government watchdog agency.

In a report released this week, the HHS Office of Inspector General says the Centers for Medicare & Medicaid Services overpaid Ohio by $29.5 million. In another report, it said CMS overpaid Kansas by $17.8 million.

The OIG notes that this isn’t the first time it has found overpayments tied to the provision in the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA), which allows states to receive bonus payments if they enroll more children in Medicaid than a CMS-specified baseline. Thus, the OIG identified CHIPRA bonus payments as “a high-risk area” and continued to conduct audits.

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Its latest audits found that Ohio and Kansas failed to calculate their current enrollment in accordance with federal requirements. Rather than only counting children from three “basis of eligibility” categories, the states incorrectly included individuals from other categories, such as the “blind and disabled.”

The OIG recommended that each state refund the federal government the amount it was overpaid. Both Kansas and Ohio, however, disputed the agency’s findings and the suggestion that they return the funds.

Ohio argued that since the purpose of the law was to reward states for increasing enrollment of all eligible children, excluding those that qualify as blind and disabled doesn’t make sense. Kansas, meanwhile, said CMS wasn’t clear about the fact that it should only count children from three eligibility categories.

After reviewing the states’ comments, the OIG said it stands by its findings and recommendations.

“In its guidance to the state agencies, CMS has consistently and reasonably interpreted the statute and explained its approach in addressing Congress’s intent,” it said in its report on Ohio.

The Children’s Health Insurance Program has been a hot topic of late on Capitol Hill—and in statehouses around the country—as federal funding for CHIP expired on Sept. 30. The House voted last week to pass a funding reauthorization bill, but that measure faces a tough path to passage in the Senate amid partisan disputes about how to pay for it.

At least five states and the District of Columbia are expected to run out of money for their CHIP programs at the end of the year or early in 2018 if Congress doesn’t reauthorize funding. Another six have said they will take action before the end of the year even if their funding isn’t expected to run out.