Watchdog: HHS program lacks transparency

The Department of Health and Human Services lacks transparency in how it makes approval decisions about billions of dollars in experimental projects in the Medicaid program, the nonpartisan Government Accountability Office said Wednesday. 

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The GAO report concerns so-called 1115 waivers that the federal government grants to allow states to run test programs that would not otherwise be allowed under Medicaid. For example, states could alter the eligibility or benefits under Medicaid, the government health insurance program for the poor.

The report finds that HHS’s decision-making on whether to approve these waivers is not always clear. HHS has not issued specific criteria for making these determinations, it finds. 

Spending under the waivers is still supposed to promote Medicaid’s objectives, but the report finds that the objectives of a program are not always made clear. 

“HHS's approval documents are not always clear as to what, precisely, approved expenditures are for and how they will promote Medicaid objectives,” the report states. 

The lack of criteria plays into larger transparency issues, it says. 

“Without clear criteria for assessing how proposed expenditure authorities states are seeking will promote Medicaid objectives, and without clear documentation of the application of those criteria, the bases for HHS's decisions involving tens of billions of Medicaid dollars are not transparent to Congress, states, or the public.”

The stakes are high, as the waivers apply to about $150 billion in spending, or about one-third of Medicaid dollars, according to the report. 

HHS largely agreed, in the response section of the report, that it needs to clarify the process. It said it will “more clearly articulate how section 1115 authority is being used to assist states in addressing evolving trends or needs in their Medicaid programs.”

While the report does not specifically mention it, this waiver program has been at the center of a fight between Florida Gov. Rick Scott (R) and the Obama administration. 

Scott argues the administration is taking away waiver funds reimbursing hospitals for caring for the uninsured in an effort to force the state to expand Medicaid under ObamaCare.

The Obama administration says Florida is free to expand Medicaid or not, but that the waiver funds should not be used for costs that would otherwise be covered in a Medicaid expansion.