Florida faces $40M in fines for failing to submit Medicaid reports

The federal government has informed Florida that it is out of compliance with federal regulations because it failed to submit reports regarding its Medicaid program. (Getty Images)Florida could be forced to pay $40 million in fines to the federal government over its handling of the state’s Medicaid program.

U.S. Department of Health and Human Services Director of State Demonstrations Group Jacey Cooper sent a letter Thursday to two top Florida Medicaid officials advising them that the state faces fines and being placed under a corrective action plan unless the Agency for Health Care Administration (AHCA) submits the status reports by the end of the year.

“This letter serves as written notice that if the state does not come into compliance with submitting the deliverables, CMS [the federal Centers for Medicare & Medicaid Services] will place the state on a corrective action plan (CAP),” the letter notes.

“Additionally, the state’s failure to submit all required monitoring reports, evaluations, and other deliverables will be considered by CMS in reviewing any application for an extension, amendment, or for a new demonstration.”

The letter identifies eight documents — six quarterly reports and two annual reports — that are overdue from as long ago as two years. The reports are intended to demonstrate that the state is using federal funds to provide the required services for low-income people who need health care coverage.

The federal government has “offered alternative deadlines and technical support,” Cooper noted, but “the state has still not submitted” the required information. 

Tom Wallace, the Florida Agency for Health Care Administration’s former deputy secretary. (Screenshot from Florida Channel)

The letter mentions that Cooper discussed the required reports with former Deputy Secretary for Data and Finance Tom Wallace and Austin Noll, deputy secretary for Medicaid policy, quality, and operations, and that they had agreed the state would submit a report by the end of the month (September) and turn in all of the required information by the end of the year.

‘This is a non-issue’

When the Florida Phoenix asked AHCA why it hadn’t submitted the reports, Alecia Collins, deputy chief of staff communications & external affairs, played down the matter.

“This is a non-issue. Florida has worked with CMS on a schedule to provide the outstanding reports. Feel free to ask them yourself,” Collins wrote in an email to the Phoenix.

State Rep. Kelly Skidmore, a Democrat from Palm Beach County, told the Phoenix in a telephone call Friday that officials at AHCA have been too busy focusing on issues outside its jurisdiction and not doing their jobs.

“Stop meddling in things and do what you are intended to do,” Skidmore said, referring to AHCA’s recent webpage proffering hotly contested arguments against Amendment 4, the proposed abortion-rights amendment.

“Not standard fare”

Medicaid is a health care safety net program for the poor, elderly, and people with disabilities funded with both state and federal dollars.  

Florida requires most Medicaid beneficiaries, from infants to the elderly, to enroll in managed care plans to receive services. As of July 30, more than 3 million Floridians relied on managed care plans.

The federal government allows the state to mandate enrollment in managed care plans because of what’s known as a “Medicaid 1115” waiver. These waivers are discretionary agreements between the federal and state governments that give states flexibility regarding federal rules and regulations. In return, states with 1115 waivers are required to file quarterly and annual reports on their administration of the programs and the amount of money being spent.

Joan Alker, executive director of the Center for Children and Families at Georgetown University, said the Medicaid 1115 reporting requirements are well understood by state and federal officials and advocates.

“This is standard fare, but what is not standard fare is a state refusing to do so and CMS threatening to fine them,” Alker told Phoenix. “Many states have Section 1115 waivers and filing these reports is standard practice. Florida has been doing so for years. I can’t recall CMS ever having to fine a state for not filing these reports.”

Wallace received the letter on Thursday and resigned the same day. Wallace, who was hired in 1999, made $183,855 annually, according to a state website. 

Another wrinkle

This is the latest wrinkle in Florida’s Medicaid program. AHCA Secretary Jason Weida is a defendant in a class action filed by Floridians who say the state wrongly revoked their Medicaid benefits following the end of the COVID public health emergency.

The trial took place in August. Since last year, the state removed 1.9 million people from Medicaid, according to KFF, a nonprofit health policy research group. 

Separately, the DeSantis administration is continuing its legal challenge to a CMS rule barring states from kicking children out of the subsidized health care program, Florida KidCare.

CMS letter to AHCA Sept. 19, 2024

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