California’s Immigrant Healthcare Program Faces Federal Government Refund

By: Sam Watanuki | Published: Jun 05, 2024

California is facing the task of repaying over $52 million back to the federal government.

This reimbursement comes after a federal audit revealed improper claims for Medicaid services provided to certain immigrant patients.

Federal Audit Findings

The audit, conducted by the Office of the Inspector General at the U.S. Department of Health and Human Services, covered the period from October 2018 to June 2019.

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It found that California had improperly claimed $52.7 million in Medicaid reimbursements.

Details of the Audit

The federal auditors found that out of nearly $373 million claimed for Medicaid reimbursement, $52.7 million was improperly claimed.

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The audit highlighted the miscalculation method used by California, which had not been updated for years.

California's Response to the Findings

State officials stated that the refund had already been accounted for in the current budget plan.

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H.D. Palmer, deputy director of external affairs for the California Department of Finance, assured that this refund would not trigger additional spending cuts.

Understanding Medicaid Restrictions

Medicaid generally does not cover non-emergency services for immigrants who do not meet specific federal criteria.

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However, California has expanded its Medicaid program, Medi-Cal, to cover additional services using state funds.

Medi-Cal's Payment System

Medi-Cal pays managed care plans a fixed amount each month for each enrollee.

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The state used a formula to estimate the portion of these payments that went to non-emergency services for immigrants not covered by federal funding.


Federal Approval and Methodology Issues

California claimed that the federal government had approved its calculation method in the early 2000s.

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However, no records were found to support this approval, leading to the improper claims identified in the audit.


Recommendations from the Audit

The Office of the Inspector General advised California to refund money due to potential over-claims and collaborate with federal regulators to reassess and determine improper federal funding claims from other years.

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This thorough reevaluation is necessary to ensure compliance with federal guidelines and to fix any financial errors that may have occurred.


State's Plan for Repayment

The California Department of Health Care Services plans to repay the federal government in full by June 30.

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The department acknowledged the audit’s findings and is cooperating to resolve the issues.


Developing a Refined Methodology

California is collaborating with the Centers for Medicare & Medicaid Services to develop a more accurate methodology for future claims.

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This effort aims to update payment and claiming processes to prevent similar issues.


Impact on California's Budget

As mentioned, despite the need to repay $52.7 million, the refund is not expected to cause additional budget cuts.

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The state had anticipated this repayment in its budget plan, which includes various spending reductions to address a $44.9-billion deficit.


Future Implications for Medi-Cal

California’s efforts to refine its Medicaid claiming process could lead to more accurate funding allocations in the future.

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This will ensure that Medi-Cal can continue to provide essential services without risking federal funding issues.