Governors say states are owed $4 billion for Medicare errors

Past efforts made to correct errors by the Social Security Administration might have cost state Medicaid programs $4 billion—money that the federal government should reimburse to states, the National Governors Association (NGA) said in a letter to Health and Human Services Secretary Kathleen Sebelius.

According to the letter, disabled persons had “erroneously” been denied Social Security Disability Insurance coverage and were therefore not provided Medicare benefits, requiring strapped state Medicaid programs to often pay for their care. A 10-year program called the Special Disability Workload project was initiated to retroactively correct these errors, which occurred over several decades.

“As the corrections were made, states were charged Medicare premiums going back as far as 30 years,” the NGA wrote. “Unfortunately, no effort has been made to discharge Medicare’s liability for the services provided and paid for through state Medicaid programs. States collectively expended well over $4 billion of their own funds to cover the care that Medicare should have provided.”

NGA told Sebelius that this money owed to states should be used to cover their share of the Medicaid program.

“Your department has the authority to pay for the services provided to [Special Disability Workload] cases by reimbursing states for their share of the payments made by their Medicaid programs,” NGA wrote. “Payment to the states would be in the form of credits to the states to be used as the state share of current Medicaid expenditures. This method of satisfying the federal liability would assure that the federal expenditure for correcting the problem would benefit current Medicaid programs.”

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NGA letter to Sebelius

(PDF format)

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