NHeLP Argues OBBBA Will Inflate Medicaid Erroneous Payment Rates
In a National Health Law Program blog, the second in a series on OBBBA's changes to Medicaid's Payment Error Rate Measurement, NHeLP argues that OBBBA expands the statutory definition of "erroneous payments" to include payments lacking sufficient documentation, a category traditionally classified as "improper payments." NHeLP states this definitional change will artificially inflate erroneous payment rates by conflating administrative processing issues with fraudulent activity, even if the actual amount of erroneous payments as previously defined has not changed. The piece notes that during the most recent PERM cycle most states had no erroneous payments, and those that did generally had rates below 1 percent, and that between fiscal years 2021 and 2025 only 4 percent of payment errors involved confirmed ineligible people. NHeLP contends the changes will also expand states' financial liability and leave states with fewer resources while fueling claims of widespread Medicaid fraud.