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CMS Tightens Oversight of Medicaid Demonstration Project Costs

Despite Savings from Pilot Programs, Medicaid Costs Have Soared

The CMS has issued a guidance indicating that it will initiate tighter analysis of Medicaid waiver demonstration project costs to make sure that states are meeting budget-neutral goals.

The agency will no longer approve waivers that predict the federal government will incur additional costs for the state initiatives. According to CMS Administrator Seema Verma, Medicaid spending jumped by $100 billion from 2013 to 2016—a period that includes the first years of Medicaid expansion. The CMS primarily pays those costs.

The CMS has also released a new monitoring tool that it will require states to use for all Medicaid demonstrations. States will need to upload all of the financial data for a given demonstration project into the tool, which will consolidate the costs into one report to the agency.

The state demonstration projects are intended to serve as test runs to design and improve their Medicaid programs and inform new policy. A 2016 CMS policy that curbed states’ ability to keep leftover funds from their demonstrations or carry them forward to new demonstrations has saved the government nearly $63 billion in two years.

Source: Modern Healthcare, August 27, 2018

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