Four States Reviewed Received Increased Medicaid COVID-19 Funding Even Though They Terminated Some Enrollees’ Coverage for Unallowable or Potentially Unallowable Reasons, A-06-21-09002

Summary

A Department of Health and Human Services Office of Inspector General audit report, Report No. A-06-21-09002, dated September 2023 and issued by Inspector General Christi A. Grimm, titled Four States Reviewed Received Increased Medicaid COVID-19 Funding Even Though They Terminated Some Enrollees' Coverage for Unallowable or Potentially Unallowable Reasons. OIG reviewed New York, Florida, Texas and Minnesota, which received an additional $12.8 billion in increased COVID-19 FMAP funding from January 1, 2020 through June 30, 2021. It reports that two States terminated coverage for 26,915 total enrollees for unallowable reasons and three States for 220,113 total enrollees for potentially unallowable reasons, and that enrollees in Minnesota may have been charged up to $951,202 in cost-sharing. OIG recommends that CMS work with the States on refunds; CMS concurred.

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Full text

Department of Health and Human Services
OFFICE OF
INSPECTOR GENERAL

FOUR STATES REVIEWED RECEIVED
INCREASED MEDICAID COVID-19
FUNDING EVEN THOUGH THEY
TERMINATED SOME ENROLLEES’
COVERAGE FOR UNALLOWABLE OR
POTENTIALLY UNALLOWABLE REASONS

Christi A. Grimm
Inspector General

September 2023
A-06-21-09002
Inquiries about this report may be addressed to the Office of Public Affairs at
Public.Affairs@oig.hhs.gov.

Office of Inspector General
https://oig.hhs.gov

The mission of the Office of Inspector General (OIG) is to provide objective oversight to promote the
economy, efficiency, effectiveness, and integrity of the Department of Health and Human Services (HHS)
programs, as well as the health and welfare of the people they serve.  Established by Public Law
No. 95-452, as amended, OIG carries out its mission through audits, investigations, and evaluations
conducted by the following operating components:
Office of Audit Services.  OAS provides auditing services for HHS, either by conducting audits
with its own audit resources or by overseeing audit work done by others.  The audits examine the
performance of HHS programs, funding recipients, and contractors in carrying out their respective
responsibilities and provide independent assessments of HHS programs and operations to reduce waste,
abuse, and mismanagement.
Office of Evaluation and Inspections.  OEI’s national evaluations provide HHS, Congress,
and the public with timely, useful, and reliable information on significant issues.  To promote impact,
OEI reports also provide practical recommendations for improving program operations.
Office of Investigations.  OI’s criminal, civil, and administrative investigations of fraud and
misconduct related to HHS programs and operations often lead to criminal convictions, administrative
sanctions, and civil monetary penalties.  OI’s nationwide network of investigators collaborates with the
Department of Justice and other Federal, State, and local law enforcement authorities.  OI works with
public health entities to minimize adverse patient impacts following enforcement operations.  OI also
provides security and protection for the Secretary and other senior HHS officials.
Office of Counsel to the Inspector General.  OCIG provides legal advice to OIG on HHS
programs and OIG’s internal operations.  The law office also imposes exclusions and civil monetary
penalties, monitors Corporate Integrity Agreements, and represents HHS’s interests in False Claims Act
cases.  In addition, OCIG publishes advisory opinions, compliance program guidance documents, fraud
alerts, and other resources regarding compliance considerations, the anti-kickback statute, and other
OIG enforcement authorities.

Notices

THIS REPORT IS AVAILABLE TO THE PUBLIC
at https://oig.hhs.gov

Section 8M of the Inspector General Act, 5 U.S.C. App., requires
that OIG post its publicly available reports on the OIG website.

OFFICE OF AUDIT SERVICES FINDINGS AND OPINIONS

The designation of financial or management practices as
questionable, a recommendation for the disallowance of costs
incurred or claimed, and any other conclusions and
recommendations in this report represent the findings and
opinions of OAS.  Authorized officials of the HHS operating
divisions will make final determination on these matters.

Report in Brief
Date: September 2023
Report No. A-06-21-09002
Why OIG Did This Audit
The COVID-19 pandemic was
declared a nationwide Public Health
Emergency (PHE) in January 2020.  In
March 2020, Congress enacted the
Families First Coronavirus Response
Act (FFCRA), which provided States
with a temporary increase of
6.2 percentage points to their regular
Federal medical assistance
percentage (FMAP) rates.  To qualify,
States must meet certain FFCRA
requirements.  The increased
COVID-19 FMAP became effective
January 1, 2020, and extends through
December 31, 2023.  The amount of
the FMAP increase began phasing
down April 1, 2023.

Our objective was to determine
whether selected States met the
requirements to receive the
increased COVID-19 FMAP.

How OIG Did This Audit
We selected four States (New York,
Florida, Texas, and Minnesota) for
review.  These States received an
additional $12.8 billion in FMAP
funding during our audit period
(January 1, 2020, through June 30,
2021).  For each State, we
(1) reviewed the PHE eligibility
policies and procedures; (2) obtained
and compared a list of Medicaid
enrollees on March 18, 2020, and
June 30, 2021; (3) analyzed enrollee
terminations; (4) analyzed cost-
sharing related to COVID-19 testing,
services, or treatment; and
(5) reviewed premiums to verify that
the States met FFCRA requirements.

The full report can be found at https://oig.hhs.gov/oas/reports/region6/62109002.asp.
Four States Reviewed Received Increased Medicaid
COVID-19 Funding Even Though They Terminated
Some Enrollees’ Coverage for Unallowable or
Potentially Unallowable Reasons

What OIG Found
The four States we reviewed did not meet all of the requirements to receive
the increased COVID-19 FMAP.  All four States terminated Medicaid enrollees’
coverage for unallowable or potentially unallowable reasons.  Two States
(Texas and Minnesota) terminated Medicaid coverage for 26,915 total
enrollees for unallowable reasons, and three States (New York, Florida, and
Minnesota) terminated Medicaid coverage for 220,113 total enrollees for
potentially unallowable reasons due to a lack of support or documentation.

Additionally, Minnesota may have inappropriately charged some enrollees
cost-sharing for COVID-19 testing, services, and treatment.  Minnesota could
not determine whether Medicaid enrollees were responsible for any cost-
sharing, and enrollees may have been charged up to $951,202 for COVID-19-
related testing, services, and treatment.

What OIG Recommends and CMS Comments
We recommend that CMS (1) work with the four States to determine what
amount, if any, of the funding they received because of the increased
COVID-19 FMAP should be refunded to the Federal Government; and (2) work
with Minnesota to determine whether Medicaid enrollees were responsible
for any cost-sharing for COVID-19 testing, services, or treatments and, if any
cost-sharing is identified, work with Minnesota to ensure that enrollees are
reimbursed for any out-of-pocket expenses incurred.

In written comments on our draft report, CMS concurred with both of our
recommendations and described actions that it planned to take to address our
recommendations.  Specifically, CMS stated it will work with the States to
determine what amount, if any, of the funding the States received because of
the increased COVID-19 FMAP should be refunded to the Federal
Government.  CMS also stated that it will work with Minnesota to determine
whether the State improperly imposed any cost-sharing for COVID-19 testing,
services, or treatments and, if so, determine the appropriate remedy.  CMS
also provided technical comments on our draft report.

Four States Reviewed Received Increased Medicaid COVID-19 Funding Even Though They Terminated Some
Enrollees’ Coverage for Unallowable or Potentially Unallowable Reasons (A-06-21-09002)
TABLE OF CONTENTS

INTRODUCTION ............................................................................................................................... 1

Why We Did This Audit ....................................................................................................... 1

Objective ............................................................................................................................. 1

Background ......................................................................................................................... 1

Medicaid Program ................................................................................................... 1

Federal Requirements and Other Guidance ........................................................... 2

How We Conducted This Audit ........................................................................................... 4

FINDINGS ......................................................................................................................................... 5

All Four States Terminated Enrollees’ Coverage for Unallowable or
   Potentially Unallowable Reasons ..................................................................................... 5
New York ................................................................................................................. 6
Florida ..................................................................................................................... 6
Texas ....................................................................................................................... 6
Minnesota ............................................................................................................... 7

Minnesota May Have Inappropriately Charged Cost-Sharing for COVID-19
   Testing, Services, or Treatment ....................................................................................... 7

RECOMMENDATIONS ..................................................................................................................... 8

CMS COMMENTS ............................................................................................................................ 8

APPENDICES

A: Audit Scope and Methodology ....................................................................................... 9

B: CMS Comments ............................................................................................................ 11

Four States Reviewed Received Increased Medicaid COVID-19 Funding Even Though They Terminated Some
Enrollees’ Coverage for Unallowable or Potentially Unallowable Reasons (A-06-21-09002)
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INTRODUCTION

WHY WE DID THIS AUDIT

The COVID-19 pandemic was declared a nationwide public health emergency (PHE) in January
2020.  In March 2020, Congress enacted the Families First Coronavirus Response Act (FFCRA) in
response to the COVID-19 PHE.1  The FFCRA provided States with a temporary increase of
6.2 percentage points to their regular Federal medical assistance percentage (FMAP) rates.  To
qualify for the increased COVID-19 FMAP, States must meet requirements in section 6008(b) of
the FFCRA.  The increased COVID-19 FMAP became effective January 1, 2020, extends through
December 31, 2023, and began phasing down the amount of the FMAP increase April 1, 2023.
We judgmentally selected four States for review based on the amount of funding received,
including three high-funded States (New York, Texas, and Florida) and one medium-funded
State (Minnesota).  These four States received a total of $12.8 billion in additional funding from
the temporary increase in their FMAPs for the period January 1, 2020, through June 30, 2021.

COVID-19 has created extraordinary challenges for the delivery of health care and human
services to the American people.  As the oversight agency for the Department of Health and
Human Services (HHS), the Office of Inspector General (OIG) oversees HHS’s COVID-19 response
and recovery efforts.  This audit is part of OIG’s COVID-19 response strategic plan.2

OBJECTIVE

Our objective was to determine whether selected States met the requirements to receive the
increased COVID-19 FMAP.

BACKGROUND

Medicaid Program

The Medicaid program provides medical assistance to low-income individuals and individuals
with disabilities.  The Federal and State Governments jointly fund and administer the Medicaid
program.  At the Federal level, the Centers for Medicare & Medicaid Services (CMS) administers
the program.  Each State administers its Medicaid program according to a CMS-approved State
plan.  Each State has considerable flexibility in designing and operating its Medicaid program
but must comply with applicable Federal requirements.

1 The Families First Coronavirus Response Act (P.L. No. 116-127) (Mar. 18, 2020).

2 OIG’s COVID-19 response strategic plan and oversight activities can be accessed at HHS-OIG's Oversight of
COVID-19 Response and Recovery | HHS-OIG.

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The Federal Government pays its share of a State’s medical assistance costs based on the
FMAP, which varies depending on the State’s per capita income.3  Although FMAPs are adjusted
annually for economic changes in the States, Congress may increase or decrease FMAPs at any
time.  The standard FMAP varies by State and ranged from 50 percent to 78 percent during our
audit period.4

Federal Requirements and Other Guidance

In March 2020, Congress enacted the FFCRA in response to the COVID-19 PHE.  Section 6008 of
the FFCRA provides a temporary 6.2-percentage-point increase to each qualifying State’s FMAP
under section 1905(b) of the Social Security Act (the Act), effective January 1, 2020, extending
through December 31, 2023, and began phasing down the amount of funding on April 1, 2023.5

All States are eligible for the increased COVID-19 FMAP provided they meet the requirements
of section 6008(b) of the FFCRA.  To qualify for the increased COVID-19 FMAP during our audit
period, States were required to:

•
maintain eligibility standards, methodologies, or procedures that are no more
restrictive than what the State had in place as of January 1, 2020;

•
not charge premiums that exceed those in place as of January 1, 2020;

•
cover—without impositions of any cost-sharing—COVID-19-related testing,
services, and treatments including vaccines, specialized equipment, and
therapies; and

•
not terminate individuals from Medicaid if such individuals were enrolled in the
program as of March 18, 2020, or become enrolled during the emergency
period, unless the individual voluntarily terminates eligibility or is no longer a
resident of the State (under the continuous enrollment requirement which was
set to end on March 31, 2023).6

3 Social Security Act (the Act) § 1905(b).

4 83 Fed. Reg. 61157, 61159 (Nov. 28, 2018) and 84 Fed. Reg. 66204, 66206 (Dec. 3, 2019).

5 The PHE ended May 11, 2023.  Section 5131(a) of the Consolidated Appropriations Act amended section 6008(a)
of the FFCRA to continue the temporary FMAP increase through Dec. 31, 2023, and phases down the amount of
the FMAP increase beginning Apr. 1, 2023 (P.L. No. 117-328) (Dec. 29, 2022).

6 Division FF, Section 5131, Consolidated Appropriations Act (P.L. No. 117-328) (Dec. 29, 2022).  Section
5131(a)(2)(C) separates the end of the continuous enrollment condition from the end of the COVID-19 PHE by
amending section 6008(b)(3) of the FFCRA to end continuous Medicaid enrollment as a condition for claiming the
temporary FMAP increase on Mar. 31, 2023.

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Title 42, section 433.400 of the Code of Federal Regulations (CFR), effective November 2, 2020,
interprets and implements FFCRA section 6008(b)(3).  This CFR section sets forth requirements
for a State to receive the increased COVID-19 FMAP.  Enrollees for whom a State must maintain
coverage are those who: (1) qualify for minimum essential coverage; (2) are enrolled under a
Medicare Savings Program (MSP); (3) qualify for coverage of testing, services, and treatments
for COVID-19, including vaccines, specialized equipment, and therapies; or (4) otherwise are
enrolled under a State plan or waiver.  A State must maintain coverage for individuals who were
validly enrolled as of or after March 18, 2020.7

Title 42, section 433.400(d) outlines exceptions to the continuous enrollment requirement.
A State may terminate a person’s Medicaid enrollment during the PHE if:

• the enrollee or the enrollee’s representative requests a voluntary termination of
eligibility,

• the enrollee ceases to be a resident of the State, or

• the enrollee dies.

A State may also limit coverage to services necessary for treatment of an emergency condition
for an enrollee who no longer meets the definition of a lawfully residing child or pregnant
person.8

A State must maintain coverage for those who were validly enrolled as of or after
March 18, 2020 (42 CFR § 433.400(c)(2)).  Under 42 CFR § 433.400(b), a person is:

. . . not validly enrolled if the agency determines the eligibility was erroneously
granted at the most recent determination, redetermination, or renewal of
eligibility (if such last redetermination or renewal was completed prior to

7 In Carr v. Becerra, No. 22-cv-0098, the U.S. District Court of the District of Connecticut issued a preliminary
injunction on Jan. 31, 2023, enjoining HHS from enforcing the Interim Final Rule (42 CFR § 433.400) with respect to
certain individuals.  These individuals included all individuals who were enrolled in Medicaid in any State on March
18, 2020, or later and, as a result of the adoption of the Interim Final Rule on Nov. 6, 2020, either had their
Medicaid eligibility reduced to a lower level of benefits and were determined to be eligible for an MSP or will have
their Medicaid eligibility reduced to a lower level of benefits and be determined to be eligible for an MSP prior to a
redetermination conducted after Mar. 31, 2023 (No. 3:22-cv-988(MPS)).  For the purposes of this audit, we
identified enrollees who were disenrolled for reasons other than voluntary withdrawal and residency, or whose
termination reasons could not be supported, and did not identify in our findings enrollees whose coverage was
reduced to limited benefits and determined to be eligible for the MSP as result of the Interim Final Rule.  We also
did not review whether States reinstated full Medicaid coverage for those determined to be eligible for the MSP
whose coverage was reduced as a result of the Interim Final Rule.

8 For States that have elected the option under section 1903(v)(4) of the Act to provide full benefits to lawfully
residing children or pregnant persons, the States must limit coverage to such enrollees to emergency care (42 CFR
§ 433.400(d)(2)).

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March 18, 2020) because of agency error or fraud (as evidenced by a fraud
conviction) or abuse (as determined following the completion of an investigation
pursuant to §§ 455.15 and 455.16 of this chapter) attributed to the [person or
the person’s] representative, which was material to the determination of
eligibility.  Individuals receiving medical assistance during a presumptive
eligibility period . . . have not received a determination of eligibility by the
State under the State plan and are not considered validly enrolled . . . for
purposes of this section.

According to CMS’s FAQs about COVID-19:9, 10

States that want to qualify for the increased [COVID-19] FMAP should make a
good faith effort to identify and reinstate individuals whose coverage was
terminated on or after the date of enactment for reasons other than a voluntary
request for termination or ineligibility due to residency.  At a minimum, States
are expected to inform individuals whose coverage was terminated after
March 18, 2020, of their continued eligibility and encourage them to contact the
state to reenroll.  Where feasible, States should automatically reinstate coverage
for individuals terminated after March 18, 2020, and should suspend any
terminations already scheduled to occur during the emergency period.  Coverage
should be reinstated back to the date of termination.

HOW WE CONDUCTED THIS AUDIT

We selected four States (New York, Florida, Texas, and Minnesota) for review.  These four
States received an additional $12.8 billion in FMAP funding during our audit period
(January 1, 2020, through June 30, 2021).  For each State, we: (1) reviewed the PHE eligibility
policies and procedures; (2) obtained and compared a list of Medicaid enrollees on
March 18, 2020, and June 30, 2021, to identify enrollees whose coverage was terminated
during our audit period; (3) analyzed enrollee terminations; (4) analyzed cost-sharing related to
COVID-19 testing, services, or treatment; and (5) reviewed premiums to verify that the States
met the requirements of the FFCRA section 6008(b).11

9 CMS, “COVID-19 FAQs for State Medicaid and CHIP Agencies,” updated Jan. 6, 2021.  Available online at
https://www.medicaid.gov/state-resource-center/downloads/covid-19-faqs.pdf.  Accessed on July 28, 2021.

10 While these FAQs were applicable during our audit period, the court found in Carr v. Becerra, No. 22-cv-0098,
that CMS must reinstate previous guidance “Frequently Asked Questions” “Updated as of 4/13/2020,” and “Last
Updated June 30, 2020” with respect to individuals identified in footnote 7.  The previous guidance also included
language that States should make a good faith effort to identify and reinstate individuals whose coverage was
terminated on or after the date of enactment for reasons other than a voluntary request for termination or
ineligibility due to residency.

11 The Mar. 18, 2020, enrollment totals were 6 million in New York, 4.2 million in Florida, 4.5 million in Texas, and
1.1 million in Minnesota.

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We conducted this performance audit in accordance with generally accepted government
auditing standards.  Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions
based on our audit objectives.  We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.

Appendix A contains the details of our audit scope and methodology.

FINDINGS

The four States we reviewed did not meet all of the requirements to receive the increased
COVID-19 FMAP.  All four States maintained eligibility procedures that were no more restrictive
than the procedures in place as of January 1, 2020, and the two States (Texas and Minnesota)
that charged premiums as part of their program did not raise the premiums in place as of
January 1, 2020.  However, two States (Texas and Minnesota) terminated Medicaid enrollees’
coverage for unallowable reasons.  Three states (New York, Minnesota, and Florida) terminated
Medicaid enrollees’ coverage for potentially unallowable reasons due to a lack of support or
documentation.  One State (Minnesota) may have inappropriately charged some enrollees cost-
sharing for COVID-19-related testing, services, or treatment.

ALL FOUR STATES TERMINATED ENROLLEES’ COVERAGE FOR UNALLOWABLE
OR POTENTIALLY UNALLOWABLE REASONS

FFCRA section 6008(b)(3), as amended, states that to qualify for the increased COVID-19 FMAP
States must, through March 31, 2023, not terminate an individual from Medicaid who was
enrolled in the program as of March 18, 2020, or became enrolled during the emergency period
unless the individual voluntarily terminates eligibility or is no longer a resident of the State
(continuous enrollment requirement).

None of the four States we reviewed completely complied with the continuous enrollment
requirement of the FFCRA.  Two States (Texas and Minnesota) terminated Medicaid coverage
for 26,915 total enrollees for unallowable reasons.  Three States (New York, Florida, and
Minnesota) terminated Medicaid coverage for 220,113 total enrollees for potentially
unallowable reasons due to a lack of support or documentation.  Specifically:

• New York could not support that it had terminated coverage for 142,378 enrollees for
allowable reasons;

• Florida could not support that it had terminated coverage for 62,641 enrollees for
allowable reasons;

• Texas terminated coverage for 22,680 enrollees for unallowable reasons; and

Four States Reviewed Received Increased Medicaid COVID-19 Funding Even Though They Terminated Some
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• Minnesota could not support that it had terminated coverage for 15,094 enrollees for
allowable reasons, had an additional 4,228 unallowable coverage terminations for
enrollees who were later reinstated (but each had a lapse in coverage), and terminated
coverage for 7 enrollees for unallowable reasons.12

Enrollees who were disenrolled for unallowable reasons went without Medicaid coverage
during the PHE, and some could have had out-of-pocket expenses.  Because these States did
not comply with the continuous enrollment requirement, they may not have been eligible to
receive some of the funding they received because of the increased COVID-19 FMAP.

New York

New York could not support that it had terminated Medicaid coverage for 142,378 enrollees
(2.36 percent of total March 2020 enrollment) for allowable reasons.  These terminations are
potentially unallowable due to a lack of support or documentation.

New York officials stated that the “reason codes” listed for terminations in New York’s
enrollment system were not specific enough to easily determine the reason the coverage
ended for all enrollees.  New York officials stated that a manual review of the 142,378 enrollees
was not feasible due to the time associated with individual reviews of the enrollees’ coverage
terminations.

Florida

Florida was unable to provide support that it had terminated 62,641 enrollees (1.5 percent of
total March 2020 enrollment) for allowable reasons.  These terminations are potentially
unallowable due to a lack of support or documentation.

Florida officials stated that they did not maintain codes for why an enrollee’s coverage was
terminated.  The State agency’s system was not designed to capture reasons for termination
because this was not something that was needed before the PHE.

Texas

Texas terminated Medicaid coverage for 22,680 enrollees (0.5 percent of total March 2020
enrollment) for unallowable reasons.  There were two causes for these terminations.

First, prior to the PHE, Texas’ enrollment system was designed to automatically terminate
coverage for enrollees when certain criteria were met (e.g., when an enrollee’s supplemental
security income ended, Medicaid coverage was automatically terminated).  During the PHE,
Texas disabled some, but not all, of those automatic terminations.

12 The seven enrollees were not reinstated during our audit period.

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Second, although Texas made changes to its termination policies and procedures to comply
with the FFCRA requirements, some of its employees continued to use the State’s prior
termination procedures due to high staff turnover and the many procedure changes.

Minnesota

For 19,329 enrollees (1.82 percent of the total March 2020 enrollment), Minnesota:

• could not support that it had terminated Medicaid coverage for 15,094 enrollees for
allowable reasons, so coverage for these enrollees could potentially have been
terminated for unallowable reasons; and

• terminated 4,235 enrollees’ coverage for unallowable reasons, 4,228 of whom were
later reenrolled but had a lapse in coverage, and 7 of whom had not been reenrolled at
the time of our audit.

In Minnesota, individual counties were responsible for Medicaid enrollments and terminations
during our audit period.  Employees in each county manually tracked terminations in Excel
spreadsheets before determining whether an enrollee’s coverage termination was allowable.
Due to the decentralized and manual nature of its system, Minnesota was not able to identify
the reasons for all enrollees’ coverage terminations or confirm that the terminations were for
allowable reasons.  Minnesota officials stated that it was not feasible to manually review the
termination reasons for the 15,094 enrollees.

MINNESOTA MAY HAVE INAPPROPRIATELY CHARGED COST-SHARING FOR COVID-19 TESTING,
SERVICES, OR TREATMENT

During our audit period, FFCRA section 6008(b)(4) stated that to qualify for the increased
COVID-19 FMAP, States must cover—without impositions of any cost-sharing—COVID-19-
related testing, services, and treatments, including vaccines, specialized equipment, and
therapies.

Minnesota Medicaid enrollees may have been responsible for cost-sharing for COVID-19
testing, services, or treatment during the PHE.  Minnesota provided documentation showing
that there were 10,988 managed care encounters with a diagnosis code for COVID-19 testing,
service, or treatment with patient liability amounts totaling $951,202.

Minnesota updated its provider manual in April 2020 to inform providers that any claim with a
COVID-19 diagnosis code should be exempt from cost-sharing.  Minnesota also provided
instructions to its managed care organizations (MCOs) to bypass cost-sharing for COVID-19
testing, services, or treatment.  However, when asked about the 10,988 managed care
encounters with patient liability amounts totaling $951,202, Minnesota officials stated that
they had done very limited quality testing of the cost-sharing field in MCO encounter data and
were unable to validate the data in that field.  Therefore, Minnesota cannot determine whether

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Medicaid enrollees were responsible for any cost-sharing for COVID-19 testing, services, or
treatment.

Because Minnesota was unable to validate the amounts in the MCO cost-sharing field, enrollees
may have been charged up to $951,202 in COVID-19-related testing, services, and treatment.

RECOMMENDATIONS

We recommend that the Centers for Medicare & Medicaid Services:

• work with the four States to determine what amount, if any, of the funding they
received because of the increased COVID-19 FMAP should be refunded to the Federal
Government; and

• work with Minnesota to determine whether Medicaid enrollees were responsible for
any cost-sharing for COVID-19 testing, services, or treatments and, if any cost-sharing is
identified, work with Minnesota to ensure that enrollees are reimbursed for any out-of-
pocket expenses incurred.

CMS COMMENTS

In written comments on our draft report, CMS concurred with both of our recommendations
and described actions that it planned to take to address our recommendations.  Specifically,
CMS stated that it will work with the States to determine what amount, if any, of the funding
the States received because of the increased COVID-19 FMAP should be refunded to the
Federal Government.  CMS also stated that it will work with Minnesota to determine whether
the State improperly imposed any cost-sharing for COVID-19 testing, services, or treatments
and, if so, determine the appropriate remedy.  CMS also provided technical comments on our
draft report, which we addressed as appropriate.  CMS’s comments, excluding the technical
comments, are included as Appendix B.

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APPENDIX A: AUDIT SCOPE AND METHODOLOGY

SCOPE

We reviewed whether four selected States met the requirements to receive the increased
COVID-19 FMAP funding provided by the FFCRA.  Those four States received a total of
$12.8 billion in additional funding from the temporary 6.2-percentage-point increase in FMAP
for January 1, 2020, through June 30, 2021.13

We assessed internal controls and compliance with laws and regulations necessary to satisfy
the audit objective.  We consulted CMS officials to gain an understanding of the oversight
activities CMS performs to ensure that States met the requirements of the FFCRA.  However,
because our review was limited to these aspects of internal control, it may not have disclosed
all internal control deficiencies that may have existed at the time of this audit.  Any internal
control deficiencies we found are discussed in this report.

We conducted our audit from October 2021 through March 2023.

METHODOLOGY

To accomplish our objective, we:

• reviewed applicable Federal laws, regulations, and guidance;

• met with CMS officials to discuss the steps they took to ensure that States met the
requirements of the FFCRA;

• judgmentally selected four States based on the amount of funding received, including
three high-funded States (New York, Texas, and Florida) and one medium-funded State
(Minnesota);

• reviewed State plan amendments (SPAs) submitted by the selected States and approved
by CMS; 14

• obtained and compared Medicaid enrollees on March 18, 2020, and June 30, 2021, for
the selected States;

• identified enrollees whose coverage was terminated, requested reasons for
terminations, and determined whether those reasons were allowable;

13 New York received $5.5 billion, Texas received $4.1 billion, Florida received $2.3 billion, and Minnesota received
$929 million.

14 SPAs approved by CMS are posted on the Medicaid.gov website at
https://www.medicaid.gov/medicaid/medicaid-state-plan-amendments/index.html.  Accessed on Dec. 1, 2022.

Four States Reviewed Received Increased Medicaid COVID-19 Funding Even Though They Terminated Some
Enrollees’ Coverage for Unallowable or Potentially Unallowable Reasons (A-06-21-09002)
10
• obtained and reviewed policies and procedures related to enrollee eligibility and
premiums during the PHE from the four States we reviewed and compared them to the
policies and procedures in place prior to the PHE;

• obtained a list of medical codes from each selected State that had cost-sharing for
testing, services, and treatments related to COVID-19;

• obtained claims and encounter data for the quarter ended June 30, 2021, for
COVID-19-related medical codes to determine whether enrollees were charged cost-
sharing for testing, services, and treatments related to COVID-19;

• obtained Medicaid premiums charged as of January 1, 2020, and determined whether
any changes were made to premiums after January 1, 2020;

• sent questionnaires and held discussions with officials from the four selected States to
gain an understanding of the changes the States made to meet the requirements of the
FFCRA; and

• met with CMS officials to discuss the results of this audit.

We conducted this performance audit in accordance with generally accepted government
auditing standards.  Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions
based on our audit objectives.  We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.

"'l-
DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
Administrator
Washington, DC 20201
DATE:
TO:
FROM:
SUBJECT:
July 19, 2023
Juliet T. Hodgkins
Principal Deputy Inspector General
Chiquita Brooks-LaSure CL, (?}_ ";;(c.S}
Administrator
D
Centers for Medicare & Medicaid Services
Office ofTnspector General (OIG) Draft Report: Four States Reviewed Received
Increased Medicaid COYID-19 Funding Even Though They Terminated Some Enrollees'
Coverage for Unallowable or Potentially Unallowable Reasons (A-06-21-09002)
The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to review and
comment on the Office of Inspector General's (OIG) draft report. CMS takes seriously its
responsibilities to protect taxpayer funds by conducting thorough oversight of the Medicaid program.
Because Medicaid is jointly funded by states and the federal government, and is administered by states
within federal guidelines, both CMS and states have key roles as stewards of the program and work
closely together to carry out these responsibilities.
Tn order to support both states and the federal government in responding to the coronavirus disease 2019
(COYID-19) Public Health Emergency (PHE), Congress passed the Families First Coronavirus
Response Act (FFCRA; P.L. 116-127) on March 18, 2020. As described in the OlG's report, section
6008 of the FFCRA authorized states to claim a temporary 6.2 percentage point increase in their Federal
Medical Assistance Percentage (FMAP), so long as states satisfied certain conditions. CMS provided
guidance to states on these conditions, including the continuous enrollment condition, through
Frequently Asked Questions (FAQs), 1 all state calls,2 and individualized technical assistance.
Additionally, in November 2020 CMS issued an interim final rule with request for comment (CMS-
9912-IFC) that established new regulations at 42 CFR § 433.400 implementing the continuous
enrollment condition.3
As noted in the OTG's report, there were certain circumstances in which states could terminate an
individual's Medicaid enrollment and still qualify for the increased FMAP. Further, under CMS's
guidance about section 6008 of the FFCRA, in order to remain eligible for the increased FMAP, states
1 CMS, COVID-19 Frequently Asked Questions (FAQs) for State Medicaid and Children's Health Insurance Program
(CHIP) Agencies. Accessed at: https://www.medicaid.gov/state-resource-center/downloads/covid-l 9-fags.pdf
2 CMS, Medicaid and CHIP All State Calls. Accessed at: https://www.rnedicaid.gov/resources-for-states/coronavirus-disease-
2019-covid-i 9/cmcs-medicaid-and-chip-all-state-calls/index.html,
1 Federal Register: "Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency";
Interim Final Rule with Request for Comments (85 FR 71142) (November 6, 2020).
APPENDIX B: CMS COMMENTS
Four States Reviewed Received Increased Medicaid COVID-19 Funding Even Though They Terminated Some
Enrollees’ Coverage for Unallowable or Potentially Unallowable Reasons (A-06-21-09002)
11

to make a good faith effort to identify and reinstate the Medicaid eligibility of individuals whose
enrollment was incorrectly terminated on or after the date the FFCRA was enacted. The Consolidated
Appropriations Act, 2023 (P.L. 117-328) (CAA, 2023), enacted on December 29, 2022, later ended the
continuous enrollment condition as a condition for claiming the increased FMAP on March 31, 2023. As
a result, as of April 1, 2023, states claiming the increased FMAP are no longer required to maintain the
enrollment of individuals for whom the state completes a renewal and who no longer meet Medicaid
eligibility requirements. The increased FMAP will continue to be available to states through December
31, 2023, and the amount of the FMAP increase will phase down each quarter, starting with the quarter
beginning April 1, 2023.
In addition to the continuous enrollment condition, states claiming the temporary FFCRA FMAP
increase must comply with the condition in section 6008(b )( 4), and cover any testing services and
treatments for COVID-19, including vaccines, specialized equipment, and therapies, during any quarter
in which the increased FMAP is claimed. States cannot impose deductibles, copayments, coinsurance, or
other cost sharing charges for any of these services. The condition at section 6008(b)(4) of the FFCRA
was not changed by the CAA, 2023 and remains in effect until December 31, 2023. Additionally, from
March 11, 2021 through September 30, 2024, under section 9811 of the American Rescue Plan Act of
2021 (ARP) (P. L. 117-2) (enacted March 11, 2021), all states must cover COVID-19 vaccinations for
nearly all Medicaid beneficiaries and must cover the following services for many Medicaid
beneficiaries: COVID-19 testing; treatments for COVID-19, including specialized equipment and
therapies (including preventive therapies); and, when certain conditions are met, treatment of conditions
that may seriously complicate the treatment ofCOVID-19. States are not permitted to charge cost­
sharing for the coverage required under section 9811 of the ARP. The ARP coverage requirements apply
to all states, regardless of whether they are claiming the FFCRA FMAP increase.
OIG's recommendations and CMS's responses are below.
OIG Recommendation
Work with the four States to determine what amount, if any, of the funding the States received because
of the increased COVID-19 FMAP should be refunded to the Federal Goverrunent.
CMS Response
CMS concurs with this recommendation. CMS will work with New York, Texas, Florida, and
Minnesota to detem1ine what amount, if any, of the funding the states received because of the FFCRA
FMAP increase should be refunded to the federal government.
OIG Recommendation
Work with Minnesota to determine whether Medicaid beneficiaries were responsible for any cost­
sharing for COVID-19 testing, services, or treatments, and if any cost-sharing is identified, work with
Minnesota to reimburse the beneficiaries for any out-of-pocket expenses incurred during the PHE.
Four States Reviewed Received Increased Medicaid COVID-19 Funding Even Though They Terminated Some
Enrollees’ Coverage for Unallowable or Potentially Unallowable Reasons (A-06-21-09002)
12

Response
CMS concurs with this recommendation. CMS will work with Minnesota to determine whether the state
improperly imposed any cost-sharing for COVID-19 testing services or treatments, including vaccines,
specialized equipment, and therapies. If so, after consultation with the state, CMS will determine the
appropriate remedy.
Four States Reviewed Received Increased Medicaid COVID-19 Funding Even Though They Terminated Some
Enrollees’ Coverage for Unallowable or Potentially Unallowable Reasons (A-06-21-09002)
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