CMS Warns States Against Using Medicaid Funds for Healthcare for Undocumented Immigrants

On Tuesday, May 27, the Centers for Medicare and Medicaid Services (CMS) announced increased federal oversight to prevent states from using federal Medicaid funds to cover healthcare for undocumented immigrants. In a press release, CMS stated that, under federal law, Medicaid funding is generally only available for emergency medical services for noncitizens who would otherwise qualify for Medicaid. However, CMS noted that some states have pushed those boundaries.

CMS is ramping up financial oversight through the following actions:

• Focused evaluations of select state Medicaid spending reports (CMS-64 form submissions)
• In-depth reviews of select states’ financial management systems
• Assessing existing eligibility rules and policies to close loopholes and strengthen enforcement

CMS is urging states to review and update their internal controls, eligibility systems, and cost allocation policies to ensure compliance with federal law. According to the news release, any improper spending on noncitizens will be subject to the recoupment of that expenditure.

 “If states cannot or will not comply, CMS will step in,” cautioned Drew Snyder, CMS Deputy Administrator and Director of the Center for Medicaid & CHIP Services, in a statement.

Last week, Healthcare Innovation reported on President Trump’s signature budget legislation, which would penalize 14 states that offer health coverage to unauthorized immigrants.