Medicaid waste, fraud, and abuse arise from several primary sources: legalized money laundering schemes and resulting corporate welfare; ineligible enrollees in the program; eligibility errors that allow ineligible individuals to enroll and remain enrolled; vulnerable service categories with weak oversight that create opportunities for fraud; and limited transparency, particularly in managed care. The following is a menu of policy options for states to pursue to curb waste, fraud, and abuse in their Medicaid programs and preserve the program for the truly needy.
I. Reducing Legalized Medicaid Money Laundering and Corporate Welfare
States are becoming increasingly reliant on federal sources to finance Medicaid. They utilize financing schemes, such as provider taxes and intergovernmental transfers, to draw down additional federal funding. These financing mechanisms result in large payments…
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