Objective

To determine whether Medicaid overpaid Mainstream Managed Care and Health and Recovery Plan premiums on behalf of dual-eligible individuals. The audit covered the period from March 2021 through March 2022.

About the Program

The Department of Health (Department) administers the State’s Medicaid program. Many Medicaid recipients are enrolled in Medicare and are referred to as “dual-eligibles.” Additionally, many of the State’s Medicaid recipients receive their services through managed care, including Mainstream Managed Care (MMC), which provides comprehensive coverage, and Health and Recovery Plans (HARP), which provide specialized care to recipients aged 21 or older with serious mental illness and/or substance use disorders.

Within MMC and HARP is the Integrated Benefits for Dually Eligible Enrollees Program (IB-Dual), which became effective April 1, 2021. IB-Dual offers a special (lower) MMC and HARP premium rate for certain Medicaid recipients who enroll in Medicare and do not need long-term services and support. However, recipients in MMC or HARP who enroll in Medicare but are not eligible for IB-Dual should be disenrolled from MMC and HARP and moved to Medicaid fee-for-service (FFS) because the cost of the managed care premiums generally exceeds the cost of deductibles and coinsurance that Medicaid would pay on FFS claims for dual-eligibles.

In response to the coronavirus disease 2019 state of emergency, the federal government passed the Families First Coronavirus Response Act, which, in part, increased the federal medical assistance percentage to state Medicaid programs. In order to receive the increase, states were required to maintain managed care coverage for enrolled recipients throughout the public health emergency. In response, the Department paused disenrollment of dual-eligible recipients from MMC and HARP plans. However, in November 2020, the federal regulation was updated and allowed states to change a recipient’s eligibility group as long as minimum essential coverage (e.g., Medicaid FFS) was maintained.

Key Findings

We identified over $194.1 million in excessive MMC and HARP premium payments, as follows:

• Over $190.6 million was paid on behalf of dual-eligible recipients who were ineligible for IB-Dual. These recipients should have been removed from their MMC or HARP plan and provided FFS coverage. The excessive premium payments occurred because the Department chose not to restart disenrollment of dual-eligibles from managed care as allowed by federal regulations.
• Over $3.5 million was paid on behalf of dual-eligible recipients who appeared eligible for IB-Dual but were not enrolled timely. We found the Department’s rollout of IB-Dual did not initially include recipients who became dual-eligible prior to the date the new IB-Dual rate became effective.

Key Recommendations

• Disenroll dual-eligible recipients from MMC and HARP plans who are ineligible for IB-Dual, or who opt out, and provide them with FFS coverage.
• Review the $194.1 million in excessive premium payments and make recoveries.