Feds want $100 million back in Medicaid flap

Federal officials want Georgia Medicaid to return more than $100 million in payments made to nursing homes. The feds say these payments were not permitted under the program’s regulations.


The payments were made in fiscal years 2010 and 2011. But the Centers for Medicare and Medicaid Services also asked Georgia to return any similarly inappropriate payments for more recent fiscal years as well.

In a Dec. 8, 2014, letter and report to Georgia about the nursing home problem, regional CMS officials told the state Medicaid agency to “cease and desist this unallowable funding mechanism immediately.’’

Georgia officials said in an email to Georgia Health News that the activity has been halted, but that the state has not paid back the funds to the federal government.

The nursing home money is not the only Medicaid funding that has Georgia grappling with federal health officials.  

A federal judge ruled in February that Georgia should receive a refund of $90 million of Medicaid funds it mistakenly returned to the federal government, even though the state made its claim for the money after the two-year window to do so had expired.

Ownership mislabeled?

The nursing home payments in question involve a complicated funding formula called “upper payment limit’’ (UPL).

States have developed these UPL programs to draw down extra federal matching dollars.


Basically, under UPL, the state is able to get a higher reimbursement rate – at the Medicare level – for delivering Medicaid services. Hospitals, nursing homes or physicians can put up the matching amount, and get more money in return.

In this case, though, CMS says the state reported that 35 Georgia nursing homes were owned by local development authorities and were the source of “intergovernmental transfers’’ to get UPL dollars.

But the CMS report to state officials says “these nursing facilities are actually privately owned” — not owned by a public agency as required.

Industry under pressure

The information came from a federal review of the Georgia UPL process. A CMS team visited three development authorities, in Macon and Pulaski counties, and one covering several Central Georgia counties.

The authorities were “pass-throughs’’ for the funding transfers, the federal report says.

Terri Coughlin, a senior fellow and Medicaid expert with the Urban Institute, says UPL is a legitimate payment process for states. But she adds, “There has been a lot of abuse.”

“It is not uncommon that [federal officials] are watching this,’’ she says.

The CMS review “is like an IRS audit, looking for things that look odd. It has been a longstanding issue in the program,’’ Coughlin says.

The nursing home industry in Georgia underwent an internal shakeup last week. The Georgia Health Care Association announced that Jon Howell is stepping down as CEO of the organization, which represents nursing homes.

The wording of that announcement indicated some dissension within GHCA. A spokesman for the group declined comment Monday on the nursing home payment issue, and on whether it was a factor in Howell’s departure.

The state Department of Community Health, which runs the Medicaid program in Georgia, said in an email to Georgia Health News last week that CMS has reviewed and approved the agency’s state share of the UPL funding every year since the inception of the program.

CMS also audited the UPL program in fiscal 2006 and approved the funding mechanism for the state share at that time, said the email, from DCH spokesman Jeremy Arieh.

The state suspended the funding mechanism during fiscal 2014, he said.

CMS officials declined to comment Friday on the nursing home funding dispute.