The vice president has stated that California has not taken Medicaid fraud seriously. The state’s ambulance reimbursement scheme shows exactly why the administration is right to crack down.
The Centers for Medicare and Medicaid Services recently proposed a rule that may signal the beginning of the end for one of California’s most aggressive Medicaid financing schemes. This rule, introduced in late May, would limit many Medicaid payment arrangements to Medicare-equivalent reimbursement levels while targeting the financing mechanisms that shift excessive costs onto federal taxpayers.
The more states spend, the more federal money they receive. The proposal specifically highlights intergovernmental transfers and similar arrangements that have allowed states to inflate federal reimbursement claims.
This comes as California health officials are seeking CMS approval for pending state plan amendments designed to further expand reimbursement arrangements built around intergovernmental transfers—the very mechanism now under increased federal scrutiny.
For years, states have exploited loopholes in Medicaid’s financing rules to draw down additional funds from Washington. CMS now appears ready to impose significant restrictions on this practice.
