California Improperly Claimed Over $50 Million in Medicaid Funding for Illegal Immigrants: HHS-OIG Report

NTD Newsroom
By NTD Newsroom
May 27, 2024California
California Improperly Claimed Over $50 Million in Medicaid Funding for Illegal Immigrants: HHS-OIG Report
Workers help applicants register for healthcare insurance during an enrollment fair at the Bay Area Rescue Mission in Richmond, Calif. on March 31, 2014. (Justin Sullivan/Getty Images)

A recent audit by the Department of Health and Human Services Office of Inspector General (OIG) alleges that the state of California claimed tens of millions of dollars in improper Medicaid funding, which was used to provide health services to illegal immigrants.

According to the audit, which was released last month, the California Medicaid program used inaccurate methodology in its evaluation of the reimbursements for resources which were provided to ineligible non-citizens.

“States are generally prohibited from claiming Federal reimbursement for Medicaid services, other than treatment of an emergency medical condition, provided to certain noncitizens with unsatisfactory immigration status (UIS),” according to a statement by the OIG.

“California applied a proxy percentage (39.87 percent) to capitation payments made on behalf of noncitizens with UIS to identify costs of providing nonemergency services and to avoid claiming Federal reimbursement for these costs,” the statement went on to say.

The OIG said that this amounted to more than $50 million in federal Medicaid reimbursements, which exceed the Medicaid benefit entitlement for illegal aliens.

“California improperly claimed $52.7 million in Federal Medicaid reimbursement because it continued to use the proxy percentage that was developed in the early 2000s without assessing whether the percentage correctly accounted for the costs of providing nonemergency services to noncitizens with UIS under managed care,” the statement continued.

Moreover, California did not follow protocol in the assessment and subsequent follow-up assessments of the proxy percentage, according to the OIG.

The OIG issued a recommendation, which would entail a full reimbursement to the federal government, in order to remedy the situation, as well as to “determine the amount of any improperly claimed Federal reimbursement for capitation payments made on behalf of noncitizens with UIS for an agreed-upon period not covered by our audit.”

“We acknowledge California’s difficulty in replicating our recalculated proxy percentage and calculated refund amount. By refunding the $52.7 million to the Federal Government using a manual process, the State agency would address our first recommendation,” the office said.

According to House Homeland Security Committee Chairman Mark Green (R-Tenn.), the amount of Medicaid spending to provide emergency medical services for illegal immigrants has gone from around $3 billion to over $7 billion between fiscal 2020 and fiscal 2021, effectively more than doubling.

A new directive by the Biden administration, published earlier this month, would see thousands of illegal immigrants receive healthcare through ObamaCare by allowing illegal immigrants protected from deportation under the 2012 Deferred Action for Childhood Arrivals (DACA) program from accessing healthcare through the Affordable Care Act.

The new directive, which could see implementation as early as Nov. 1, could lead to around 100,000 uninsured illegal immigrants accessing taxpayer-funded health insurance by applying for coverage through and state-based marketplaces, according to Biden administration estimates.

At the start of this year, hundreds of thousands of individuals in California aged 26 to 49 became eligible for Medi-Cal coverage, of whom a large portion are illegal immigrants, according to the California Department of Health Care Services.

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